Milk markets have experienced a remarkable rally over the past two months, driven largely by renewed interest in buying cheese to both meet USDA contracts and to refill foodservice pipelines.
Will recent price strength carry into the second half of the year? Naomi Blohm of Total Farm Marketing says Thursday’s milk production report from USDA will be the first challenge these markets face.
“The nearby contract, June, put in a topping signal with a bearish key reversal. So, [there was] a little bit of setback and profit taking from that,” she explained on Farm Journal Live. “Going forward this week, it’s probably going to be a quieter week for milk trade until we get to Thursday’s milk production numbers.”
Thursday’s report will include production data from May when producers were being asked to cut their production by 10-20%, which Blohm says will be interesting to see.
“Thursday’s report will give us the first clue on [whether or not prices will stay high],” she said. “Then from there, we just have to wait and see.”
In addition to production factors, Blohm has her eye on export markets.
“Will China do some more buying of any whey powder?” she asked. “Watching exports, and the production levels [released] later this week, and that’ll be the next clues and cues for the coming months.”