Transcript

00:00:01:07 – 00:00:26:13
Futures trading involves risk and is not suitable for all investors. Content provided in this segment is meant for educational purposes and is not a solicitation to buy or sell commodities.

Welcome to Ag Smarter: The Dairy Feed, a new podcast from the Ever.Ag team. Each week, we bring you clear, timely insight across dairy, grain, and feed markets—focused on what’s moving, why it matters, and what it means for your operation.

00:00:26:15 – 00:00:57:13
I’m Jim Matthews. I’m joined today, as always, by the one and only Kathleen—hopefully from the playroom in upstate slash western New York. Kathleen, it’s about 10:00 Chicago time, Tuesday, April 14th. How is the playroom, Kathleen?

You know what, Jim? I actually cleaned it the other day, so I’m happy to report that walking into the playroom, I did not nearly break my ankle—which is usually what happens.

00:00:57:16 – 00:01:26:23
Yeah, but you know, there are a couple tractors on the ground. So in case I get bored in this ten minutes while you’re talking about the grain markets, I do have some opportunities to play with my tractors.

And I think, Jim, it’s Tuesday. Seems like the dairy markets are picking up a little bit. We saw nonfat CME spot yesterday tick up to—I believe it was a new record high—2.13.25, if I’m not mistaken.

00:01:26:25 – 00:01:57:03
We’re seeing a little bit of a bounce back in futures today. The Class III market is a little bit higher here at the start. Class IV is a little bit higher as well. So overall, a bit more green on the screen here in dairy than what we’ve seen in the last few weeks.

Yeah, a bit green on the screen as well for the grain and feed markets, at least this morning. I’m trying to determine still, Kathleen, if this is a bit of a Turnaround Tuesday action, as things were largely, let’s say, steady to lower as we traded on Monday.

00:01:57:03 – 00:02:18:26
Just speaking into the corn market in particular, it does feel like the wheat market is at least propping that corn market up a little bit. Again, we’ve been talking about that with a lot of folks we work with, on how wheat has really been leading the way. It’s been a very volatile market over the past couple months, but especially in recent weeks.

00:02:18:26 – 00:02:44:01
And we’re seeing some of the weather in the central and western plains—that dryness really hurting wheat conditions here across the United States. So Kansas City wheat is up almost $0.20. Chicago’s up $0.10. So for nearby corn to be up $0.05 feels like wheat’s giving it just a nice little bit of support, especially as some of the other markets—the energy markets—are at least trading lower today.

00:02:44:01 – 00:03:08:29
So I think that’s an interesting sign. Yeah, we’ve crude oil trading closer to $90 than it is $100, which is quite the change in recent weeks or months.

So Jim, I have a couple questions for you, if I may share. What’s your thought on why crude is trading a little bit lower? And by the time people listen to this, it’s possible this could be a complete 180 from our conversation—but what’s the news this morning?

00:03:08:29 – 00:03:27:15
Yeah, that’s a great preface. So Kathleen, we’re recording at 10:10 now, Chicago time on Tuesday. You could listen to this and we could be at $120 a barrel by the time you’re listening. It’s a volatile market with volatile headlines.

00:03:27:15 – 00:03:53:19
It does feel, at least for the time being, the ceasefire remains enforced from both sides, although we are blockading Iranian ports as of this morning. So that’s clearly a delicate situation, as it has been for the past four or five weeks now, when the conflict began.

00:03:53:19 – 00:04:17:05
But the markets at least feel encouraged by the current situation. Crude oil has pulled back. The stock markets have also been showing some decent strength over the past few days as well—some real nice recoveries from the various equity markets.

00:04:17:11 – 00:04:36:09
So stocks feel like they’re going to be earnings-focused more so than conflict-focused at the moment. Energy feeling some pullback. Grains largely steady, if not for that wheat condition situation.

And then Kathleen, we had a really interesting discussion internally yesterday that you led around the dairy market. So I’d like to stick to that, if you don’t mind.

00:04:36:12 – 00:05:03:04
From a dairy perspective, one thing that I’m really watching is still this nonfat market. We’ve seen significant appreciation, as I noted, in the CME nonfat price, and futures have been following along for the most part—but certainly pricing in a bit of a discount to where CME prices are sitting today.

00:05:03:04 – 00:05:36:24
Especially as we get toward the tail end of the year. But even still, $1.90 May nonfat is a sharp difference from where we were trading earlier in the year.

And as I look at the futures space, we’re talking about $20-plus Class IV milk really all the way through August at this point in time.

00:05:36:24 – 00:06:24:27
What’s supporting it? I think in the U.S. marketplace—and I think we’ve talked about this here in the last couple of weeks—supply is tight on NFDM. We’ve found ourselves with a lot of value-add type capacity in the marketplace, especially in places like the Northeast.

00:06:24:27 – 00:06:53:22
So I think that generally there’s just not as much powder sitting out there in the marketplace. And we’ve seen this notable rally on the backside of people hunting and pecking for what product is available.

00:06:53:22 – 00:07:13:13
And Kathleen, in terms of Class III and Class IV futures—after going through that commentary—are we going to see Class IV ultimately come back to earth a little bit, or is Class III maybe going to try and catch up?

00:16:06:28 – 00:16:31:20
We’ll be watching planting progress and crop condition scores weekly from this point on, as fundamentals regain their spot as a primary market driver.

Good luck to everyone as planting season gets underway, and we’ll see you next week.

00:16:31:23 – 00:16:34:24
Okay, Jim, that’s going to do it for this episode. If you found today’s discussion helpful, please be sure to like and subscribe, and share it with a colleague or friend who could use some market clarity right now.

We’ll see you next time on Ag Smarter: The Dairy Feed.