From the parlor pit 12-15
SLip slidin away..... Me trying to walk you ask? OH NOOOOO it;s this milk mkt. All it can do right now is drop and fast. Block cheese fell to $1.33 and some change they actually are under barrels by a penny!
However with the convoluted milk pricing system we have butter has begun to come back to #1.65 in the spot mkt. which kept class 3 from going into freefall. Class 3 only lost 4 cents yesterday while giving up 7 cents in the Jan 11 contract month. Jan closed at 13.11 can you say ouch!
Now I was way off on some of my predictions first I didn't think that blocks would crash thru 1.39 then I was sure that 1.35 would hold, Well I am not making anymore guesses. Just so you know the next line of resistance is back in March at 1.26, that translated into $12.90 base milk for my federal order.
Second I didn't think the congress would push this much more spending on us in the Lame Duck but they have what does that mean? (remember this is contingent on the bill passing) this will put huge inflation into the mkt. no one seems to want to put the brakes on the printing presses thereby pushing money onto the commodities and lowering our dollars value. With our dairy prices already below world prices we don't get the benefit of a cheaper dollar to spur on additional purchases. Oh it doesn't hurt us but it isn't the boost that the grains get.
On to the international front. Today is the the day of the next Fonterra auction it will be interesting to watch the price action. With the wetness in OZ milk production finally started to slow although it will be short lived it still is a nick in the production side. Areas of Kiwi land are very concerned about drought, While I haven't read anything which would lead me to believe that it has hampered production it certainly will not help to sustain production. And finally in Russia if the regulators allow for it to happen PEPSICO will be the largest dairy manufacturer in Russia! That is very interesting.
WE haven't lost any cattle in the crazy weather we have had and milk production has held up well for us. Every thing seems to take twice as long but what else are we going to do this time of year? BE Safe. JR