Today, futures reacted to strong offers on the spot auction for block cheddar cheese, which had been a point of strength for seasonally high cheese prices. After several days of very low trading volumes, markets acted decisively. Class III dropped 20-40 cents in Class III. Class IV contracts were slightly positive after buy side interest in spot butter indicated fat prices may be nearing a bottom. Friday’s Milk Production report will offer an update on the pace of California dairies recovering from avian influenza.
Today’s Highlights from Ever.Ag’s Know Your Markets
- The CME butter market continued to regain lost ground, rising three cents to reach $2.4400 per pound. Volume was heavy, with 18 lots changing hands. All other commodities dropped lower, with spot blocks slipping below the $1.90-per-pound mark to close at $1.8975, $0.0225 lower. Barrels also declined, down $0.0075 to $1.8075 per pound. Spot dry whey and NDM each shed a penny, ending the day at slipping to $0.5450 and $1.2700 per pound, respectively.
- With cheese slipping, Class III futures tumbled. The March contract fell 52 cents to $19.08 per hundredweight while March “all cheese” dropped to $1.8390 per pound, losing $0.0410.
- The US NDM price is slipping, with the week-to-date average down to $1.28 per pound, but New Zealand SMP is also on the decline, closing at $1.25. With Europe at $1.18 per pound, US’s product is still more expensive than global competitors. Meanwhile, US cheese and butter remain well below New Zealand and EU pricing.
Ever.Ag - The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. The information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.
