Monday Morning Huddle
30 November 2020

Highlights From Last Week

Cheese Monthly Averages Will Settle Sharply Lower Versus October

During last week’s shortened trading week, the block Cheddar price increased slightly from the prior week lows. USDA confirmed in last week’s Cold Storage report that US cheese inventories have declined on a monthly basis for six consecutive months, but HighGround cautions that the strong milk availability expected into the first half of 2021 will push cheese stocks higher. Market reports from the USDA state that cheese plant managers were receiving repeated calls from milk suppliers looking to find homes for excess milk during the holiday weekend.

While the market will trade today before the average is finalized, the November monthly block Cheddar average is currently $2.0739 per pound, a $0.6364 or 23% drop from October. The barrel Cheddar weekly average is down $0.3538 versus October, averaging $1.8675 per pound. The NFDM settlement of $1.0950 per pound on Wednesday is the highest value in nearly two weeks as Asian demand is expected to persist through the winter; the GDT event tomorrow will provide additional perspective on the price trend throughout the end of the year. The story remains bearish in butter regardless of the steeper than normal October stocks decline as inventories remain burdensome.

Second Pharmaceutical Company to Apply for Emergency FDA Vaccine Approval

Following Pfizer’s application on November 20 for emergency vaccine approval, Moderna announced that it will apply today for vaccine authorization. The first injections could be given as early as December 21. Moderna’s application is based on data that shows the vaccine is 94.1% effective, with 100% effectiveness at preventing severe disease from the coronavirus. The company is on track to produce 20 million doses by the end of December, and 500 million to 1 billion in 2021.

Last Week’s Reports & Analysis

Cold Storage (Oct ’20)
The October butter drawdown exceeded the five-year average decline, an encouraging sign for demand following the September monthly drop that was also stronger than average. The 43.7 million-pound October drawdown was higher versus the five-year average 39 million pounds that typically… Full Report

China Dairy Import Volume Analysis
China’s imports reflected double-digit percentage growth on nearly every tracked commodity, pointing toward the country’s elevated need to build inventories to meet current demand as consumers experience more… Full Report

Reports This Week

USDA Crop Progress – Monday, November 30
Agricultural Prices – Monday, November 30
GDT Auction – Tuesday, December 1
Weekly EU Dairy Commodity Prices – Wednesday, December 2
National Dairy Products Sales Report (NDPSR) – Wednesday, December 2
Announcement of Class and Component Prices – Wednesday. December 2
USDA Dairy Products (October ’20) – Thursday, December 3
USDA Dairy Market News Midpoint Prices – Thursday, December 3
USDA Weekly Dairy Cow Slaughter – Thursday, December 3
USDA Biweekly International Prices – Thursday, December 3
US Dairy Export/Import Data – Friday, December 4

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