Zenith Trading & Holding Corporation

Introduction

A trend we note among commodities recently is a singificant downmove in milk prices.

Class III Milk Futures (DLH26) – Key Trade Factors to Watch To anticipate direction in Class III milk futures (March 2026 contract, DLH26), focus on the drivers that typically move dairy markets: 1 U.S. Milk Production (Supply) Bullish if: Production drops Bearish if: Production rises Watch: USDA Milk Production Report (monthly) Cow numbers Milk per cow (productivity trends) That's roughly 68 lb. per day per cow. Feed costs (corn & soybean meal) are around $11.64 per 100 lb. of milk. This is lower than recent annual feed cost data. If feed costs fall, margins improve → farmers expand output → pressure on prices. 2 Cheese Market (Primary Pricing Driver) Class III is heavily tied to cheddar cheese prices. Watch: CME Cheese Blocks & Barrels Block–barrel spread Spot trading volume Falling cheese prices = direct pressure on Class III futures. 3 Exports (Global Demand) Exports are critical. Watch: U.S. Dairy Export sales (weekly/monthly) China demand Mexico purchases (largest U.S. dairy buyer) Global Dairy Trade (GDT) auction results Strong global demand → supports milk Weak global demand → bearish 4 Cold Storage Report Rising cheese inventories = bearish Tight inventories = bullish This report often moves futures if there's a surprise. 5 Seasonal Patterns Milk is seasonally weakest: During spring flush (March–May) Production peaks → prices often soften into early spring. If DLH26 is weakening now, seasonal supply pressure may be part of it. 6 Feed Costs (Margin Signal) Corn and soybean meal matter. If: Corn drops sharply → milk production expansion → bearish Corn rallies → herd contraction risk → bullish

Moving Average Chart

Moving Average with Confirmations

The idea behind this chart reflects YouTube traders' beliefs that siple indicators work best. Their idea is to fit the periof of the moving average by trial and error to where it appeats the price hovering near or crossing the moving average often (but ot always) gives the most reliable signals for a reversal. We attepted the "fit" and then looked for confirmations. Colnfirmations were when the Commodity Channel Index exceeded + or - 100, or when the MACD line sinks below or rises above a "reasonable" distance from tghe center line. In hose cases, the MA signal is to be taken more seriously, other times less so. Based upon that, this method would suggest the previous major shift was to an uptrend still in p;rogress, but due to seasonal and other factors, mensioned elsewherein thie article, we think the safer bet is for a continued downmove in milk prices.

Intermarket Analysis

We fed Milk and Live Cattle into a neural network to get the following result:

The way this is supposed to work is that bar-height indicates confidence level in predictions based upon data fed into a neural network. The taller the bars, the better the confidence level. What we see here is a succession of successful trades within a major continuing downtrend.

Point & Figure Chart

Reaction-Trend Program

This method is giving too many false signals, not decidely reacting or trending, suggest using a different approach with longer holding periods.

Archive List

01-12-2026: March Silver (SIH26): : Administration Clashing with Fed Independence Supportive for Uncertainties

12-28-2025: March Gold: Runaway Inflation & Weakenng Dollar Support Gold

11-20-2025: March Cocoa: Cheaper for Grocers to Give It Away

11-17-2025: Selection of Commodities To Be Reviewed

Stocks Site.

Music of Francis Poulenc

Trading in commodities involves substantial risk and past performance is no guarantee of future profits. Zenith does not sell advice nor does it manage discretionary accounts other than its own. Readers should be aware of the vested interest that all traders/brokers have in encouraging other traders to make the same transactions. No one should follow investment advice blindly. This web site should be used only as a "sounding board" for confirming one's own opinion. Any suggested order placements should be reviewed and reset to fit current market conditions by individual traders. Recommendations may include trades which have already been made on the same or a previous day. Commodity recommendations here are not tracked.

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