USDA's Solicitation Announcement Causes Class III Futures to Soar

December 7, 2020

Butter continues to climb higher with good volume to go with it in the CME Cash Dairy Product Trade. Butter gained 4.50 cents to $1.5250 on 12 trades. Blocks added 1 to $1.5950. Barrels gained half a penny to $1.4050/lb. Grade A Nonfat Milk remains at $1.15 while Dry Whey sits at $.4625/lb.

Class III milk futures soared to follow up Friday’s USDA solicitation announcement purchases on both butter and fluid milk. $60 million will be purchased in fresh fluid milk while $50 million will go to butter for various food nutrition assistance programs. December milk gained just 4 to $15.39/cwt. January milk surged 41 cents to $16.13/cwt. February climbed 40 cents to $16.82/cwt. Class III 2021 is averaging $17.00/cwt. Class IV milk saw wide bids and offers with only April trading and gaining 8 cents to $15.50/cwt.

January soybeans saw plenty of movement as the overnight session traded as low as $11.49. Soybeans then reversed course, moving to $11.69 just before midday and settled the day back at $11.5850/bushel. December corn gained 2.50 cents to $4.1950/bushel. December soybean meal fell beneath a major trend line, settling at $386.50/ton. The market will be looking for confirmation of this move over the next couple of days. December Chicago Wheat reversed off its negative course early on to manage a 4.75 cent gain to $5.7125/bushel. Fats, feeders, and hogs declined to start off the week. December live cattle lost 87 cents to $108.00/cwt. January feeder cattle fell $1.97 to $137.80/cwt. December hogs decreased $1.37 to $64.50/cwt. January crude oil also settled 54 cents lower to $45.72/barrel.