Class III futures have been somewhat stable for contracts through the end of the year. Contracts in 2024 have been developing a slight uptrend over the past 2 weeks and traders may be a bit more optimistic over milk prices next year. Class IV futures continue an uptrend even though butter price has shown some weakness recently. Recent support for Class IV had developed from strength in nonfat dry milk over the past two weeks providing the support needed to offset the weakness of butter.
Dry whey has been trending higher over the past two weeks but more importantly has been quietly moving higher since the middle of July. It has not been the focus of the trade and it has been choppy, and the trade generally puts greater emphasis on cheese and butter. However, price has been quietly trending higher without much fanfare. Price set a low on July 12th at 22.50 cents and has now risen to 33.50 cents. There have been some setbacks, but the trend is up. It is interesting to see that as price has been trending higher as demand has been increasing. Over the past month there have been 209 loads of dry whey traded on the daily CME spot market. That equates to about 9.196 million pounds of dry whey. One would think that inventory must be decreasing as demand is improving.
It is uncertain how much inventory will need to decline before it might have a greater impact on price. The aspect about dry whey that is different from cheese and butter is that it is not as seasonal. Holidays and special events such as demand during football season has a large impact on cheese and butter demand whereas demand for dry whey is generally more constant. It is used as an ingredient in feed, as an ingredient in many foods, and as an ingredient in beverages.
By ROBIN SCHMAHL
October 17, 2023
dairyherd.com
Comments