rounded corner
rounded corner
top border

Paragon Investments' Futures File: Milk, Soybeans & U.S. Dollar


Bookmark and Share

Milk Market Frothy

U.S. milk futures are nearing a nine-month high, with prices approaching 17 cents per pound.

For U.S. dairy farmers, low-cost corn and soybeans, along with high-value milk, present a golden opportunity, but trouble may be lurking around the corner.

Global dairy prices have fallen to an eight-month low, which could ultimately drain U.S. prices lower as low-cost dairy from foreign markets undercut U.S. products.

The worlds largest dairy exporter is the island nation of New Zealand, which accounts for almost 20% of global sales. New Zealand has expanded its production in recent years, especially to meet rising demand from China, where consumer demands have shifted toward consuming more dairy in recent years.

U.S. dairy farmers would love to win more Chinese and other foreign business, as one fifth of all U.S. farm income is derived from foreign trade, a figure that has been rising in recent years.

Buyers Want Soybeans

As U.S. farmers are finishing the soybean harvest this week, they were greeted with rising soybean prices, which neared $10.00 per bushel. Prices gained on hopes for more demand from Chinas pork producers, who need soybeans to feed their increasing hog herds. Livestock demand in the United States is stronger as well, as U.S. hog and cattle numbers are near record levels.

Prices are also gaining as concerns mount about dry weather in Argentina, where farmers are planting their crop. Argentina is one of the worlds largest soybean exporters, but bad weather there could hurt their upcoming crop, creating more demand for U.S. beans.

U.S. Dollar Tumbles

The U.S. dollar dropped hard this week, falling to the lowest level in over a month. The greenback lost its charisma after recent announcements from the Federal Reserve indicated that inflation levels are generally low, which could keep stimulus measures and low interest rates around for longer.

Currency investors prefer higher interest rates and dumped the buck in response. As the U.S. dollar dropped, precious metals rose, with gold gaining $10 per ounce on Wednesday. For U.S. consumers, a lower dollar means more expensive foreign goods, while U.S. exporters generally see more foreign demand for their goods.



Recent articles from this author



About the author


With a degree in Grain Science / Management from Kansas State University, Mr. Haverkamp has worked directly with and for several corporations in research, logistics, and origination of commodity products. Among these are Continental Grain, Kansas Wheat Commission, National Livestock Association, Kice Industries, and Land 'O Lakes. Mr. Haverkamp is a regular guest analyst on both radio and television programs throughout the Midwest and also provides fundamental and technical research for Bloomberg, DTN, Dow Jones, The Wall St. Journal, CNN and CNBC as well as several other local and regional news syndicates. Mr. Haverkamp sat on the board of directors for the NIBA (National Introducing Brokers Association) in Chicago for five years and on the National Futures Association's nominating committee for one year. Mr. Haverkamp began trading in 1987 and founded Paragon Investments in 1996. 

  Mr. Haverkamp continues to provide consulting services for individual investors, livestock operations, grain processors, and individual producers as well as holding the title of CEO for Paragon.

Published by Barchart
Home  •  Charts & Quotes  •  Commentary  •  Authors  •  Education  •  Broker Search  •  Trading Tools  •  Help  •  Contact  •  Advertise With Us  •  Commodities
Markets: Currencies  •   Energies  •   Financials  •   Grains  •   Indices  •   Meats  •   Metals  •   Softs

The information contained on InsideFutures.com is believed to be accurate but is not guaranteed. Market data is furnished on an exchange delayed basis by Barchart.com. Data transmission or omissions shall not be made the basis for any claim, demand or cause for action. No information on the site, nor any opinion expressed, constitutes a solicitation of the purchase or sale of any futures or options contracts. InsideFutures.com is not a broker, nor does it have an affiliation with any broker.


Copyright ©2005-2018 InsideFutures.com, a Barchart.com product. All rights reserved.

About Us  •   Sitemap  •   Terms of Use  •   Privacy Policy