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GDT Review with Jon Spainhour – July 16, 2024
Listen Now
Cody Koster and Jon Spainhour take a deep dive into this week’s GDT report.
Questions or comments? Contact Jon at [email protected], Cody at [email protected], or give us a call at (312) 492-4200.
Show Transcript
(Transcript auto-generated)
00;00;00;10 – 00;00;09;02
VOICEOVER
Future 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.
00;00;09;05 – 00;00;16;07
CODY
Hello everybody. Welcome back to another Game Tuesday. I’m your host, Cody Koster, with me from Chicago, Mr. John Spain, our John, how are you today.
00;00;16;08 – 00;00;20;12
JON
Doing so well here on this beautiful Tuesday summer afternoon.
00;00;20;12 – 00;00;28;09
CODY
Cody, we’re happy to have you here halfway through July the 16th today. Kind of a confusing GDP auction that we had this morning. Yeah.
00;00;28;10 – 00;00;51;14
JON
You know, Cody, just confusing in terms of two reasons expectations and the index configuration itself. Let me start out by saying skim milk powder down 0.8%. That one was relatively in line with where futures were looking, maybe slightly higher, but futures were indicating that we would move lower here. The GDP pulse. This came in right around the same price as the GDP poll.
00;00;51;14 – 00;01;17;11
JON
So we can’t skim within expectations. And coming into last night some of those futures contracts we’re looking for almost 10% lower. And the GDP pulse was looking for, you know, 4 to 5% lower. So homo powder coming in 2.4% lower, amp up 3.8%. Butter up 0.9. So both of the fats had some strength in there.
00;01;17;11 – 00;01;41;19
JON
Nothing to write home about cheddar though. Once again up 6%. If you remember, we’ve been up 10%, down 10%. Now back up 6%, coming in at 191 on the cheddar equivalent side per pound. Something that just stands out to me as a bit confusing and just eyeballing it here. Trust me, whole milk powder as I understand it, makes up the biggest portion of the index and then skim milk powder behind it.
00;01;41;19 – 00;02;01;23
JON
And both of those commodities were down. However, AMF was up like I mentioned, AMF up 3.8, cheddar up six, water up 0.9. Our index shows that we were up 1.4% on the weighted average price. So you know it’s just one of those deals. You kind of accustom the same one home up powders down or home up powders higher.
00;02;01;23 – 00;02;13;07
JON
You know the index kind of goes like that. This one there was evidently a big enough spread between the commodities, that whole milk powder being down 2.4%. The auction was still able to settle higher on the aggregate index.
00;02;13;12 – 00;02;30;24
CODY
You mentioned cheddar cheese up 6%, and we had mozzarella, which we all know is not a very heavily traded commodity on the GDP, but down 0.8% coming in at $1.92 with our spot auction having a little bit of a lift today in the green, still below GDT prices as of right now.
00;02;30;24 – 00;02;50;13
JON
Well, you know, if I have to look at cheddar volumes with a bombastic side eyes, then I really have to do that with mozzarella there. Cody. I mean, I just these are hard prices to take a hard indication with. They are prices. Nonetheless, we do have to be aware of that. Just the volumes associated with that are so low in this mozzarella price that we’re seeing here.
00;02;50;13 – 00;03;10;18
JON
I have not looked into this weeks, but last week it wasn’t even New Zealand mozzarella. It was product coming out of Europe and very, very lightly traded. I think there were 3 or 4 loads that traded last week on the market, so have to be careful with that. But nevertheless, you are correct, we are just slightly below that price in terms of could that potentially spur exports out of the US?
00;03;10;18 – 00;03;14;16
JON
I have my reservations about that, but nonetheless it it could be possible.
00;03;14;16 – 00;03;34;19
CODY
We’ve got our doubts about it. Let’s be honest about this here. Yeah. Talking about looking at it with a side. I regions purchased or as another way put a total purchase by region I should say down pretty heavily by almost every single region except for maybe the Middle East, which had a little bit of an uptick. So definitely not the purchasing that we saw, you know, on different auctions towards the beginning of this year.
00;03;34;22 – 00;03;35;24
CODY
But anyways.
00;03;35;25 – 00;03;56;01
JON
You’re absolutely right. You know, if you’re looking towards the regional purchases, I think we always want to focus on North Asia, which we would say is China event change down 9% year over year, change down 22% and you know, just looking at that chart of Chinese purchasing, it’s just got gone from bad to worse to even worse here.
00;03;56;02 – 00;04;17;21
JON
Maybe finding some stability in here. They just haven’t been here. We talked about it in the past. Kind of the savior of the show, if you will, has been Southeast Asia on this one. They were down Southeast Asia down 14% versus the last auction. And down 7% versus the same auction last year. So Southeast Asia really starting to step back here.
00;04;17;21 – 00;04;37;19
JON
Maybe if we wanted to say who really did a nice job here and punching outside of their weight class, I think we would have to point to the Middle East, the Middle East, up 115% versus the last auction, however, still down 26% versus last year. So, you know, when we look at it from what they’ve been doing recently, the Middle East did really kind of step up here.
00;04;37;19 – 00;04;59;20
JON
But versus what they’ve done in the 2023 area, you know, still a lower number here. So all in all just not the strength in purchasing. When I think especially out of Asia. And I think that’s probably what caused skimmed milk powder and whole milk powder to decrease like that. Those regions do buy quite a bit of those powders, and if they’re not buying that, just create some slack in the system here.
00;04;59;20 – 00;05;01;16
JON
So I would just point that out.
00;05;01;20 – 00;05;13;29
CODY
And I think as you’ve mentioned before, we’ve talked about if you’re trying to hold your breath and guess when China’s coming back to the buying table, keep holding. Right? I mean, there’s just nothing that says that they are returning after this auction. By any stretch of the imagination.
00;05;14;01 – 00;05;27;00
JON
I wouldn’t look at it and say that we should be expecting to see them. And then when you talk to anybody in the international market that’s China facing. I know we’ve mentioned it a few times, but boy, a lot of pessimism surrounding the possibility of that happening.
00;05;27;03 – 00;05;35;27
CODY
Well, I mean, still as a net aggregate, a positive GDP this morning slightly. But John, are there any final thoughts you want to leave the listeners with on this specific all dairy trade?
00;05;36;01 – 00;05;55;14
JON
I guess I would just look at it to say, when we look at the fat markets, the fat market, as we pointed out, was up 0.9%. That’s a $3 butter market on a, you know, 82% per pound equivalent, maybe a little bit less on an 80% per pound basis. But within that, I would say the butter market is feeling relatively strong and relatively supported out there.
00;05;55;14 – 00;06;21;25
JON
Or the fat market in general, that is going to make it difficult for the US butter market to move to much lower at the moment. The reason I say that is, is we don’t have to export that much butter in the US for the price to be supported, but if we were to slip below this international price of $3 or so, that could spur on some exports and that could be something that could be rocket fuel on to the US butter market.
00;06;21;25 – 00;06;46;29
JON
At the very least, though, I think it keeps us supportive. I would point out, however, though, that the nonfat market we certainly have to respect the international price when it comes to nonfat dry milk. We are at 116 on the GDP right now. The US this morning responded by moving to 117 on the spot. There’s a temptation to say, well, I understand what the international price is doing, but there’s quite a bit of heat here in the US.
00;06;46;29 – 00;07;04;22
JON
If it has an effect on butter, it might have an effect on nonfat and cause our prices to go higher. And I think that there’s a lot of reasons that if we look at the nonfat market in a vacuum, be it nonfat production or nonfat stocks and the potential for some heat in here, you could say, boy, that’s a bullish scenario.
00;07;04;23 – 00;07;24;24
JON
I just challenge everyone to remember in general, we are tethered to that international price. Certainly we can trade slightly above it for a while, but then in the end, we have to export so much of our nonfat and skim production that we have to be in line with the international price and with the international price having moved lower and having the potential to move even lower.
00;07;24;24 – 00;07;42;10
JON
And here not much. We’re at 116, but still the potential of a move that a little bit lower. I certainly am skeptical about any big upside movement here in the domestic market, and that is simply based on where the international price is. And again, on the GDP. We’re at 116, right?
00;07;42;12 – 00;07;57;03
CODY
Well, John, as always, we appreciate your insight into the global dairy trade. John and I are actually going to be back with everyone in two weeks to host the next GDP podcast. But until then, everyone have a great week and even better weekend and we will see you next time.
Disclaimer: TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THE INFORMATION AND COMMENTS CONTAINED HEREIN ARE PROVIDED BY EVER.AG AS GENERAL COMMENTARY OF MARKET CONDITIONS. THIS INFORMATION SHOULD NOT BE INTERPRETED AS TRADING ADVICE OR RECOMMENDATION WITHOUT FURTHER DISCUSSION WITH YOUR EVER.AG ADVISOR. THIS IS A MATTER OF SOLICITATION.
—
The following music was used for this media project:
Music: Funky Intro 29 by TaigaSoundProd
Free download: https://filmmusic.io/song/9520-funky-intro-29
License (CC BY 4.0): https://filmmusic.io/standard-license
Artist website: https://linktr.ee/taigasoundprod
© Ever.Ag 2023, confidential and proprietary.
This episode is also available on the following
platforms:
Apple Podcasts
Listen Now
YouTube Music
Listen Now
Spotify
Listen Now
Questions or Comments?
Simply respond to this email or give us a call at 312-492-4200.
The post GDT Review with Jon Spainhour – July 16, 2024 appeared first on .
View all episodes
By Ever.Ag
5
55 ratings
Listen Now
Cody Koster and Jon Spainhour take a deep dive into this week’s GDT report.
Questions or comments? Contact Jon at [email protected], Cody at [email protected], or give us a call at (312) 492-4200.
Show Transcript
(Transcript auto-generated)
00;00;00;10 – 00;00;09;02
VOICEOVER
Future 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.
00;00;09;05 – 00;00;16;07
CODY
Hello everybody. Welcome back to another Game Tuesday. I’m your host, Cody Koster, with me from Chicago, Mr. John Spain, our John, how are you today.
00;00;16;08 – 00;00;20;12
JON
Doing so well here on this beautiful Tuesday summer afternoon.
00;00;20;12 – 00;00;28;09
CODY
Cody, we’re happy to have you here halfway through July the 16th today. Kind of a confusing GDP auction that we had this morning. Yeah.
00;00;28;10 – 00;00;51;14
JON
You know, Cody, just confusing in terms of two reasons expectations and the index configuration itself. Let me start out by saying skim milk powder down 0.8%. That one was relatively in line with where futures were looking, maybe slightly higher, but futures were indicating that we would move lower here. The GDP pulse. This came in right around the same price as the GDP poll.
00;00;51;14 – 00;01;17;11
JON
So we can’t skim within expectations. And coming into last night some of those futures contracts we’re looking for almost 10% lower. And the GDP pulse was looking for, you know, 4 to 5% lower. So homo powder coming in 2.4% lower, amp up 3.8%. Butter up 0.9. So both of the fats had some strength in there.
00;01;17;11 – 00;01;41;19
JON
Nothing to write home about cheddar though. Once again up 6%. If you remember, we’ve been up 10%, down 10%. Now back up 6%, coming in at 191 on the cheddar equivalent side per pound. Something that just stands out to me as a bit confusing and just eyeballing it here. Trust me, whole milk powder as I understand it, makes up the biggest portion of the index and then skim milk powder behind it.
00;01;41;19 – 00;02;01;23
JON
And both of those commodities were down. However, AMF was up like I mentioned, AMF up 3.8, cheddar up six, water up 0.9. Our index shows that we were up 1.4% on the weighted average price. So you know it’s just one of those deals. You kind of accustom the same one home up powders down or home up powders higher.
00;02;01;23 – 00;02;13;07
JON
You know the index kind of goes like that. This one there was evidently a big enough spread between the commodities, that whole milk powder being down 2.4%. The auction was still able to settle higher on the aggregate index.
00;02;13;12 – 00;02;30;24
CODY
You mentioned cheddar cheese up 6%, and we had mozzarella, which we all know is not a very heavily traded commodity on the GDP, but down 0.8% coming in at $1.92 with our spot auction having a little bit of a lift today in the green, still below GDT prices as of right now.
00;02;30;24 – 00;02;50;13
JON
Well, you know, if I have to look at cheddar volumes with a bombastic side eyes, then I really have to do that with mozzarella there. Cody. I mean, I just these are hard prices to take a hard indication with. They are prices. Nonetheless, we do have to be aware of that. Just the volumes associated with that are so low in this mozzarella price that we’re seeing here.
00;02;50;13 – 00;03;10;18
JON
I have not looked into this weeks, but last week it wasn’t even New Zealand mozzarella. It was product coming out of Europe and very, very lightly traded. I think there were 3 or 4 loads that traded last week on the market, so have to be careful with that. But nevertheless, you are correct, we are just slightly below that price in terms of could that potentially spur exports out of the US?
00;03;10;18 – 00;03;14;16
JON
I have my reservations about that, but nonetheless it it could be possible.
00;03;14;16 – 00;03;34;19
CODY
We’ve got our doubts about it. Let’s be honest about this here. Yeah. Talking about looking at it with a side. I regions purchased or as another way put a total purchase by region I should say down pretty heavily by almost every single region except for maybe the Middle East, which had a little bit of an uptick. So definitely not the purchasing that we saw, you know, on different auctions towards the beginning of this year.
00;03;34;22 – 00;03;35;24
CODY
But anyways.
00;03;35;25 – 00;03;56;01
JON
You’re absolutely right. You know, if you’re looking towards the regional purchases, I think we always want to focus on North Asia, which we would say is China event change down 9% year over year, change down 22% and you know, just looking at that chart of Chinese purchasing, it’s just got gone from bad to worse to even worse here.
00;03;56;02 – 00;04;17;21
JON
Maybe finding some stability in here. They just haven’t been here. We talked about it in the past. Kind of the savior of the show, if you will, has been Southeast Asia on this one. They were down Southeast Asia down 14% versus the last auction. And down 7% versus the same auction last year. So Southeast Asia really starting to step back here.
00;04;17;21 – 00;04;37;19
JON
Maybe if we wanted to say who really did a nice job here and punching outside of their weight class, I think we would have to point to the Middle East, the Middle East, up 115% versus the last auction, however, still down 26% versus last year. So, you know, when we look at it from what they’ve been doing recently, the Middle East did really kind of step up here.
00;04;37;19 – 00;04;59;20
JON
But versus what they’ve done in the 2023 area, you know, still a lower number here. So all in all just not the strength in purchasing. When I think especially out of Asia. And I think that’s probably what caused skimmed milk powder and whole milk powder to decrease like that. Those regions do buy quite a bit of those powders, and if they’re not buying that, just create some slack in the system here.
00;04;59;20 – 00;05;01;16
JON
So I would just point that out.
00;05;01;20 – 00;05;13;29
CODY
And I think as you’ve mentioned before, we’ve talked about if you’re trying to hold your breath and guess when China’s coming back to the buying table, keep holding. Right? I mean, there’s just nothing that says that they are returning after this auction. By any stretch of the imagination.
00;05;14;01 – 00;05;27;00
JON
I wouldn’t look at it and say that we should be expecting to see them. And then when you talk to anybody in the international market that’s China facing. I know we’ve mentioned it a few times, but boy, a lot of pessimism surrounding the possibility of that happening.
00;05;27;03 – 00;05;35;27
CODY
Well, I mean, still as a net aggregate, a positive GDP this morning slightly. But John, are there any final thoughts you want to leave the listeners with on this specific all dairy trade?
00;05;36;01 – 00;05;55;14
JON
I guess I would just look at it to say, when we look at the fat markets, the fat market, as we pointed out, was up 0.9%. That’s a $3 butter market on a, you know, 82% per pound equivalent, maybe a little bit less on an 80% per pound basis. But within that, I would say the butter market is feeling relatively strong and relatively supported out there.
00;05;55;14 – 00;06;21;25
JON
Or the fat market in general, that is going to make it difficult for the US butter market to move to much lower at the moment. The reason I say that is, is we don’t have to export that much butter in the US for the price to be supported, but if we were to slip below this international price of $3 or so, that could spur on some exports and that could be something that could be rocket fuel on to the US butter market.
00;06;21;25 – 00;06;46;29
JON
At the very least, though, I think it keeps us supportive. I would point out, however, though, that the nonfat market we certainly have to respect the international price when it comes to nonfat dry milk. We are at 116 on the GDP right now. The US this morning responded by moving to 117 on the spot. There’s a temptation to say, well, I understand what the international price is doing, but there’s quite a bit of heat here in the US.
00;06;46;29 – 00;07;04;22
JON
If it has an effect on butter, it might have an effect on nonfat and cause our prices to go higher. And I think that there’s a lot of reasons that if we look at the nonfat market in a vacuum, be it nonfat production or nonfat stocks and the potential for some heat in here, you could say, boy, that’s a bullish scenario.
00;07;04;23 – 00;07;24;24
JON
I just challenge everyone to remember in general, we are tethered to that international price. Certainly we can trade slightly above it for a while, but then in the end, we have to export so much of our nonfat and skim production that we have to be in line with the international price and with the international price having moved lower and having the potential to move even lower.
00;07;24;24 – 00;07;42;10
JON
And here not much. We’re at 116, but still the potential of a move that a little bit lower. I certainly am skeptical about any big upside movement here in the domestic market, and that is simply based on where the international price is. And again, on the GDP. We’re at 116, right?
00;07;42;12 – 00;07;57;03
CODY
Well, John, as always, we appreciate your insight into the global dairy trade. John and I are actually going to be back with everyone in two weeks to host the next GDP podcast. But until then, everyone have a great week and even better weekend and we will see you next time.
Disclaimer: TRADING FUTURES AND OPTIONS ON FUTURES INVOLVES SIGNIFICANT RISK OF LOSS AND MAY NOT BE SUITABLE FOR EVERYONE. THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THE INFORMATION AND COMMENTS CONTAINED HEREIN ARE PROVIDED BY EVER.AG AS GENERAL COMMENTARY OF MARKET CONDITIONS. THIS INFORMATION SHOULD NOT BE INTERPRETED AS TRADING ADVICE OR RECOMMENDATION WITHOUT FURTHER DISCUSSION WITH YOUR EVER.AG ADVISOR. THIS IS A MATTER OF SOLICITATION.
—
The following music was used for this media project:
Music: Funky Intro 29 by TaigaSoundProd
Free download: https://filmmusic.io/song/9520-funky-intro-29
License (CC BY 4.0): https://filmmusic.io/standard-license
Artist website: https://linktr.ee/taigasoundprod
© Ever.Ag 2023, confidential and proprietary.
This episode is also available on the following
platforms:
Apple Podcasts
Listen Now
YouTube Music
Listen Now
Spotify
Listen Now
Questions or Comments?
Simply respond to this email or give us a call at 312-492-4200.
The post GDT Review with Jon Spainhour – July 16, 2024 appeared first on .
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