Class III futures turned red today on the heels of a quiet spot cheese session. An offer (slightly above the market) was posted for blocks, but nothing traded. As the morning wore on, declines in Q1 Class III futures accelerated, finally closing at $19.85, down 34 cents on the day. All eyes are on tomorrow’s November Milk Production report. Market participants are eager to know whether growth in areas such as Texas, Kansas and South Dakota can once again bridge the gap created by production declines in California, as was the case in October. Additionally, expectations for 2025 will be largely centered on what cow numbers do – will growth continue and provide more cow power in the new year? Tomorrow will be key in providing insight into these important questions.
Today’s Highlights
- After two trading sessions of increases, the CME butter market changed course. Spot butter slipped to $2.5100 per pound, a penny lower, with one load changing hands. Spot NDM also declined, settling at $1.3725 per pound, down $0.0075. Six lots traded. Spot dry whey resumed its uphill climb, rising to $0.7500 per pound, up a half cent, with three lots exchanged. CME cheese markets rested, with both blocks and barrels unchanged with no trades.
- Global NDM/SMP prices continue to decline, with New Zealand down 3% and Europe down 2%, each settling at $1.22 per pound, 16 cents below the US price. The US remains the less-expensive option for cheese at $1.82 per pound compared to $2.12 in New Zealand and $2.24 in Europe. US butter ($2.51 per pound) is more than a dollar below the EU’s $3.54, while New Zealand sits at $2.93.
- As expected, the Federal Reserve cut interest rates for the third consecutive meeting, lowering rates by another quarter point. But the Fed also indicated it intends to slow the pace of cuts and will likely only lower rates twice next year.
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.
