Market Reports

The stock market suffered its worst losses of the year on Monday but the U.S. dairy markets remain firmly supported as milk tightens. On Monday, USDA will publish its much-anticipated Acreage and Crop Production reports. Next week could be volatile.

Although the bulls did not assert themselves this week, the bears are not in charge. Aside from the break from the extreme heat, all the factors that propelled the markets to their recent peak remain in play.

Dairy producers would surely prefer the energy of the early-stage rally to today’s more plodding progress. The plateau is a sign of healthy markets at work.

Almost all products rallied at the Global Dairy Trade (GDT) auction on Tuesday. However, in Europe dairy product prices continue to slip. Heat is also taking a noticeable toll on milk yields and components in much of the United States.

After some late-June fireworks, the dairy markets fizzled in the first two weeks of July. The mercury has climbed, the storms have abated, and the grain markets have climbed. Farmers were initially relieved to have a break from the spring deluge, but now – with the exception of those in parts of Nebraska – they are praying for rain.

There is no surplus of cheap milk in the traditional cheese states, which has likely slowed production of commodity Cheddar. It’s possible that European vendors don’t have enough cheese in inventory to satisfy foreign demand. If that’s the case, the bulls might take up residence in the dairy pits for a while.