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Veteran Advisor

From the parlor pit 12-9

Well I wasn't right ( come on now did you think I was going to say I was wrong?) Tuesday didn't give us a turn around.  Tuesday saw little movement in the spot cheese and butter mkts. but that didn't stop the slide in class 3.   Wednesday Saw the block cheese market take it on the chin as it gave up 5.5 cents to drop blocks down to 1.445.  This lead to a lower close in class 3 milk.  Which closed at $13.20 for Jan milk.

 

However the Class 4 is holding, as it has the life of the pork bellies mkt. with no trades again today,  although the spot butter market is heating up and showed gains in the months April.- Sept. with closes yesterday between $1.68-$1.695.

 

On the weather front a cold snap is hitting the SE which should hurt production slightly in the SE however it probably won't mean any milk gets moved into the south so Manufacturing supplies will be adequate for the continue building of inventories in cheese and butter.  Also with the big holiday break in schools not far off there is potential for some more negative movement in the class 3 mkt. as bottlers move more milk to storable products for a time.  However this is also priced in so I don't think it will be extremely negative.

 

Things to watch for as we come to the end of the year. 

 

1. Will we come to a resolution in the Mexican trade dispute which has blocked exports of cheese into that market?

 

2. Will Russia finally come to the US and buy Dairy products to offset their lower production due to drought reduced feed supplies. Depends on if USDA can stop holding meetings long enough to actually file the trade papers.

 

3. Will dryness settle into NZ and OZ causing a drop in production in the oceanic region?

 

I do think that blocks hold above 1.40.  Butter is picking back up after it's slide from just one month ago.  With commercial stocks still low by historical levels we still have some underlying fundamental bullishness in that market. 

 

And finally dumb quote of the week  Richard Brock said " I think the US bean price bubble is about to pop as China is hoarding the beans which is an artificial demand"  Hey Richard they always hoard beans it's in there DNA! Be safe JR

 

PS I had toedit this and put in Richard instead of D I C K aren't they and interchangable name?  I don't want anybody thinkin I got a potty mouth.Smiley Surprised

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Senior Advisor

Re: From the parlor pit 12-9

Marketing --slash--expert----probably a lot of humble pie to go around-------modern day financial wizard's of my IRA's cut from same cloth

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