Spot cheese prices slid sharply with blocks closing below $1.60 for the first time since March, dragging July Class III under $17 and creating a strong carry incentive for storage and hedging.
Spot block prices continued to decline, nearing one-year lows and dragging Class III futures with them, while widening global discounts could reopen doors for U.S. export opportunities.
Class III futures ended lower as cheese prices declined, despite a boost from dry whey. May milk production rose 1.6% year-over-year and the U.S. herd reached its largest size since 2021.
Butter saw heavy trading activity with 35 loads moved, but Class III futures continued to slide amid weak cheese prices, as markets await key USDA supply and demand data.
Strong global demand, especially for butter, is fueling a post-holiday rally in dairy markets, pushing Class IV milk futures back above $20 and lifting cheese and powder prices across the board.
Dairy markets rallied strongly this week, led by a sharp jump in butter prices and gains in Class III and IV futures, despite declines in global milk powder prices.
Dairy markets diverged ahead of the holiday weekend, with cheese prices falling sharply while butter surged to three-month highs on tighter cream supplies and strong exports.
Spot cheese prices fell to start the week, pressuring nearby Class III futures, as mixed signals on supply clouded market direction and traders tested the $1.90-per-pound level.
