The big disparity between spot and futures continues, with cheese and Class III futures overpriced compared to spot cheese and whey. Today’s block rally makes some sense, but it wasn’t enough to close the gap. Spot blocks would have to go higher to justify June “all cheese” at $1.9300 per pound. EU cheese prices slid lower and the US dollar gained some value back after trade discussions with China. There are signs EU milk output is improving, but will that continue into the spring and summer months?
Today’s Highlights from Ever.Ag’s Know Your Markets
Spot blocks jumped to $1.8475 per pound, gaining $0.0675, while barrels ticked up a quarter cent to $1.7725. Three lots each of blocks and barrels changed hands. The CME NDM market advanced to $1.2150 per pound, adding $0.0075, with eight lots exchanged. Dry whey dipped a half cent to $0.5250 per pound, with one load trading. CME butter was unchanged.
Futures were mixed, without any major moves. The June Class III contract rose by a penny to $18.79 per hundredweight, while Q3 futures settled down three cents at $19.06.
The global dairy price picture hasn’t changed much. So far this week, the average CME NDM price is $1.20 per pound, just slightly below $1.22 in Europe and $1.28 in New Zealand. US butter is still at a big discount, with the CME average at $2.33 per pound compared to New Zealand’s $3.54 and Europe’s $3.67. It’s a similar story in cheese. The US average so far this week sits at $1.81 per pound, well below $2.50 in New Zealand and $2.40 in Europe.
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