January 15, 2008

US milk prices surge on high corn futures

US milk prices were mostly higher on Monday following a jump in corn prices, according to Chicago Mercantile Exchange (CME) traders.

The rise in corn prices also triggered higher futures for milk. Milk producers were expected to feed cows less, thus reducing milk production, traders said.

Corn futures escalated anew on Friday and Monday after reports from USDA showed that corn supplies are less than expected.

Early Monday in electronic trading, January milk was up 10 cents at US$19.40 per cwt and February was up 25 cents at US$18.10.

USDA also estimated 2008 milk production at 190 billion lbs. on Friday, down from December's estimate of 190.5 billion, but up from its estimate for 2007 at 185.6 billion.