It was a day of convergence in the cheese space. The futures curve started the day at a steep premium to current spot levels. With spot inching a quarter cent higher (on top of yesterday’s 10-cent leap) and cheese futures losing ground by about 2-3 cents in nearby months, that gap narrowed some. Futures continue to hold a premium to spot, incentivizing spot purchases. Today’s lackluster GDT didn’t seem to damper Class IV spirits. The GDT skim milk powder average slipped to $1.2300 per pound but the US spot market pushed to $1.2550, and futures were mostly higher across the board. Likewise, US spot butter and futures were higher in the face of lower butterfat prices in the GDT auction.
Today’s Highlights from Ever.Ag’s Know Your Markets
- CME markets were relatively quiet today, with the barrel market logging the biggest gain – up three cents to close at $1.7250 per pound, with one load exchanged. Spot blocks calmed down after yesterday’s leap upward. The spot price ticked up a quarter cent to $1.7225 per pound, with seven lots trading. Butter and NDM also each added a quarter cent to close at $2.6025 and $1.2550 per pound, respectively. Three loads of butter changed hands and there were no NDM trades.
- CME cheese rose, but futures declined. The August Class III contract fell 27 cents to $18.43 per hundredweight, while Q4 futures settled at $18.75 per hundredweight, 16 cents lower. August “all cheese” futures also slipped, closing down $0.0270 at $1.9230 per pound.
- Prices slipped almost across the board at this week’s GlobalDairyTrade auction. WMP was the biggest mover, down 5.5% to $1.75 per pound. SMP declined 2.1% to $1.23 per pound. Butter dropped 4.7% to $3.41 per pound (on and 82% butterfat), while cheese dipped 2.6% to $2.20 per pound.
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