The Class III market took a bit of a breather to close out last week after some big price movements. With the two major reports both supportive to the Class III market, and blocks up 3.5¢, May Class III futures were up 32¢; June was up a massive 65¢.
A bullish USDA American cheese stocks number late Wednesday helped spur another round of buying for both Class III and Cheese futures Thursday. After opening solidly higher, prices continued to trend higher all day, but our opinion is that such a rally will be short in duration, for several reasons.
A plethora of data has been thrown at the market this week. Although milk production arrived slightly lower than expected, the futures market had done a good job of pricing in a somewhat bullish report.
May’s federal milk marketing order Class I base price is up a little, but well below a year ago. The March dairy CPI was slightly lower. Weekly California milk powder and national dairy product prices are recapped.
A weekly look at ethanol and distillers grains reports. Also, Renewable Fuel Standard (RFS) volume requirements for 2015 will be issued by June 1, and a final rule governing the volumes for 2014 and 2015 will be completed by Nov. 30.
Class III market bulls remained in control yesterday, with futures skyrocketing at one point by as much as +63¢ for June. Futures gave back significant gains by the close, exposing cracks in the bullish sentiment.