Class III futures finally saw some love today, with August bouncing off its contract lows. There has been a noticeable amount of volume changing hands between the August and September spread today. The August $17.50-$18.25 call spread traded 400 times, with that $17.50 strike implying cheese settling north of $1.70 on the NDPSR. Our competitive export prices for cheese are beginning to weigh on EU competitors, with the latest data showing increased EU NDM production, likely indicating an oversupply of cheese. One could expect US prices to converge with EU values as we approach late summer and early fall. Grain markets have rallied as a more friendly supply/demand report last week peaks trader’s interest in front of a healthy Midwestern crop.
Today’s Highlights from Ever.Ag’s Know Your Markets
- Spot butter continued to slip lower, down a penny to $2.5300 per pound, with five loads exchanged. CME NDM ticked up to $1.2800 per pound, a half-cent gain, with a healthy 12 lots trading. Six lots of blocks changed hands, but the spot price sat unchanged at $1.6250 per pound. The barrel price held steady at $1.6500 per pound, with no trades.
- After slipping lower for more than a week, Class III futures reversed course. The August contract jumped 24 cents to $17.46 per hundredweight and Q4 futures settled at $18.50, gaining a nickel. August “all cheese” futures also rose, closing at $1.7930 per pound, $0.0270 higher.
- Global milk powder prices remain tightly clustered, with the US NDM average on top at $1.27 per pound. New Zealand SMP ticked up to $1.26 per pound, while the EU price eased to $1.25. The US weekly cheese average of $1.66 per pound remains well below $2.08 in New Zealand and $2.41 in Europe. The US butter average slipped to $2.55 per pound compared to $3.32 in New Zealand and the EU’s $3.81.
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