Today’s spot market action was highly volatile, with bids appearing early in the cheese market, only to be followed by offers later in the session. Despite the back-and-forth activity, both blocks and barrels ended the day higher, which initially drove Class III futures upward. However, those gains were walked back slightly by settlement. The market appears to be grappling with uncertainty around Class III prices, particularly as we approach a critical day tomorrow with the release of the Milk Production and Cold Storage reports.
Today’s Highlights from Ever.Ag’s Know Your Markets
- CME cheese markets regained some lost ground today, with blocks adding 4.5 cents and barrels up a penny to converge at $1.8200 per pound. Three loads of blocks and two of barrels changed hands. Spot butter continued its gradual decline, shedding a penny to settle at $2.5125 per pound, with four lots exchanged.
- The February Class III contract rebounded a bit along with spot blocks, jumping 18 cents to land at $19.15 per hundredweight. Q2 futures remained below the $19 mark, settling at $18.91 per hundredweight, a nickel higher.
- USDA pegged spot milk in the Upper Midwest at a midpoint of “flat class,” unchanged on the year, down from +$1.00 last year and up from the five-year average of -$3.90. Cream remains ample, but perhaps a little tighter, with USDA reporting Upper Midwest multiples at 121. That compares to 117 last week, 119 last year and 122 on the five-year average.
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.
