Class III futures were slightly lower after a spot cheese session that saw large volumes of product change hands. Traders continue to show willingness to buy product and manufacturers appear willing to sell in the low-$1.60s, keeping Class III milk prices near $17 per hundredweight. Markets seemed to find both the Milk Production and Cold Storage reports as expected and have not made material moves.
Today’s Highlights from Ever.Ag’s Know Your Markets
- The CME NDM market made the most noise today, with the spot price climbing to $1.1600 per pound, a two-cent gain, and 11 loads changing hands. Both spot blocks and barrels ended today’s session at $1.6300 per pound, with blocks shedding a penny and barrels down a half cent. Trading volume was healthy at 10 lots of blocks and six of barrels. Spot butter regained the ground it lost yesterday, adding $0.0125 to close at $2.3300 per pound, with no trades.
- After the decline in spot cheese, Q2 Class III futures eased to $17.26 per hundredweight, a six-cent loss, while Q2 “all cheese” slipped to $1.7373 per pound, down $0.0130. Spot butter’s increase gave futures a bump, with Q2 contracts up $0.0220 to $2.4271 per pound.
- US cheese, butter and milk powder prices are still less expensive than those of global competitors. The CME average cheese price for the week so far is $1.65 per pound compared to $2.26 in New Zealand and $2.37 in Europe. The US weekly butter average stands at $2.32 per pound, far below New Zealand’s $3.39 and $3.64 in Europe. The spread is tighter for milk powders, with the US NDM average at $1.14 per pound, New Zealand SMP at $1.24 and EU SMP at $1.20.
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.
