Class III markets were green after the day’s spot cheese auction, which saw buyers show up for cheese in the $1.50s. Nearby Class III contracts appear reluctant to trade below $17 thus far, and futures ponder if they should move lower after falling nearly $1 in the past week. Today’s National Dairy Products Sales Report will likely serve as a good indicator of just how immediate the impact of new cheese processing capacity is in cheese markets, potentially showing a jump in volume sold. Class IV markets were largely quiet. Cattle markets continue to show strength despite news of a slaughter plant closure in South Dakota and negative trade news from China.
Today’s Highlights from Ever.Ag’s Know Your Markets
- Low prices triggered buyer interest in spot blocks, which climbed up to $1.6050 per pound, three cents higher, with seven loads trading. The barrel market was less active, dipping a half cent to $1.5650. One lot changed hands. Spot dry whey ticked up another penny to $0.4700 per pound, with one lot exchanged. Butter and NDM were quiet and unchanged, with no trades.
- The average US butter and cheese prices for the week so far are lower, while New Zealand and EU prices ticked higher, further widening the gap and potentially drawing more global attention to US goods. The average US cheese prices slipped to $1.61 per pound compared to $2.26 in New Zealand and the EU’s $2.41. Butter stands at $2.30 per pound, well below New Zealand’s $3.39 and $3.65 in the EU. The gap is smaller in milk powders, with US NDM at $1.16, New Zealand at $1.24 and EU at $1.21.
- As expected, the Federal Reserve announced it’s keeping interest rates steady for the second time in a row. Officials want more time to see how the President’s policies impact the economy before making a change, but they indicate they still expect to make two cuts later this year.
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