Daily Reports
In spot cheese, a break below $1.50 cannot be ruled out
Class III traded mixed Tuesday as traders try to reconcile a soaring corn market and a falling cheese market. There is a bias to want to be bullish on Class III here lately, as $1.60 seems “cheap” relative to where we’ve been so far this year. Relative is the key word there as today Chicagoans are walking to work in windbreakers and sweaters because the 50 degrees is “warm” relative to the 20 degrees of last month.
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Class III and cheese markets under pressure
More than 1,000 contracts traded in Class III futures yesterday as prices were once again under attack, dropping as much as 38 cents. The cheese market continues to be under pressure. Block and barrel cheese prices were down 1 ¾ and 2 cents, respectively.
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"Grain stocks" report steals the show
Class III prices opened lower Thursday morning, but seemed to find solid support from the limit-up corn prices and moved higher into the spot session by 10 to 20 cents, mostly with deferred contracts leading the way. Volume was moderate but soft into spot which, once again, as we approach the $1.60 mark is seeing very heavy trading with 21 cars in the block.
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Cheese markets showing psychological tendencies
It appears evident that the spot cheese buying on Monday was inspired by a psychological desire to “not miss the boat” on another move to $1.90 or $2.00 courtesy of last week’s spot activity. Since then, the market has told us that the current fundamentals do not support that kind of rally on cheese at present.
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Cheese prices rally
Cheese prices rallied Monday, but the gains in the spot market came much faster than we thought. Some were wondering if this could be the result of quarter-end approaching, but the strong demand seen last week has us thinking otherwise.
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Will block cheese turn bullish again?
Trading activity on Friday resulted in higher block prices, as well as higher class III and cheese prices. The gains can be attributed partly to the significant volume that took place in the blocks last week that culminated in block prices on Friday, increasing in value for the first time since March 11.
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Spot cheese continues to slide; blocks settle at $1.625
Class III futures traded firm initially on the heels of Tuesday afternoon’s bullish February Cold Storage Report. The early morning trade posted double-digit gains in Q2 and Q3, as trader’s reconciled the first monthly decline in February American cheese storage since 2004 against what appears to be a formidable level of support in the CME spot cheese Monday and Tuesday.
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Cold storage report bullish for butter and cheese
In our opinion, yesterday’s USDA Cold Storage report was slightly bullish for butter and bullish for American cheese. Butter inventories remain well below normal and though they built month-over-month, they lost ground vs. year-ago levels from January. Stocks increased month-over-month much less than we expected — up just 16.7 percent vs. our estimate for an increase of 36.9 percent.
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Block cheese closes at $1.65
Spot buyers responded in support of cheese prices today as an extremely large number of blocks traded - 26 loads on the day. Prices dipped early in the session, but ultimately all of the buying interest helped to keep the market from falling any further and led to buying interest in the futures market.
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All eyes remain on the spot cheese market
Friday’s Milk Production report from USDA was very neutral in our eyes, so don’t expect much of an impact as a result of that early this week. Instead, all eyes will remain on the spot cheese market as barrels seem well supported at $1.70, but blocks seem to be plentiful and making their way to the spot market.
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Spot cheese continues to decline in price
Cheese continued to decline yesterday, nearly completing a 50-percent retracement of the rally that started near the end of December. The rally that lasted almost two and a half months gave back 50 percent of the move in four days.
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- White House urges Senate to cut crop insurance in farm bill
- Corn market reacted poorly to the Crop Progress data
- 4 rules for growing a business or industry
- Corn planting pace turns from record slow to record fast
- Ag markets seemed to follow gold higher Monday afternoon
- Online systems keeps exporters abreast of market regulations
