The dairy markets have increased in volatility over the past few weeks with Class III futures posting limit moves up and down. I have written about this previously and it has unfolded earlier than expected. It may become more volatile as the summer progresses. Traders are quick to buy or sell on underlying cash movement or the perception of price movement. Milk futures indicate milk prices may be much better than last year if spot prices will hold. Milk prices will improve if demand improves, and supplies tighten. Cheese inventory so far this year has not exceeded last year leaving a higher probability supplies could tighten if domestic and international demand improves. Manufacturers report that cheese demand is improving but not enough to reduce inventory.
International cheese demand has improved. Cheese exports in March totaled 50,022 metric tons, up 20.5% from a year ago and the highest level of cheese exports recorded. This continued in April with an increase of 27% over April 2023 totaling 46,271 metric tons. This is the second highest month of exports recorded. The outlook for cheese exports has improved substantially and is providing solid support under the market.
June 11, 2024
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