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Rabobank analyst Tom Bailey says global dairy markets remain near the edge of profitability amid trade tensions, rising milk output and expected feed price increases. US All-Milk fell to $15.30 per cwt in February, while corn futures are trading above $4 per bushel through 2018 and into 2019 for the first time since 2014.
Chinese buyers have driven much of global import growth.
Rising corn prices raise dairy feed costs while ample milk supply caps milk prices, squeezing producer margins. For feed buyers, stronger corn and a looming spring flush point to tighter dairy feed margins.
hoards.comTom Bailey, RabobankMay 10, 2018After 151 past bullish macro events, Corn moved a median +0.2% over 5 sessions (57% higher; middle half -0.9% to +1.4%), and -0.3% over 20.
After 49 past bearish macro events, Milk (Class III) moved a median -0.6% over 5 sessions (33% higher; middle half -8.5% to +0.6%), and -7.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
