Class III futures started the day 10-20 cents lower in the nearby contracts before a positive spot cheese auction brought them up on the day. As the day traded, we ended up mixed and about 10 cents lower once again. The Class III market generally seems to be in a consolidation trend. Despite showing wide price swings for first half 2025 markets, futures are consistently making lower highs, indicating that price movement is trending lower as we near spring flush. Class IV futures were quiet despite heavy selling of butter and anecdotal notes of weakness in nonfat.
Today’s Highlights from Ever.Ag’s Know Your Markets
- Trading in the CME butter market was heavy, with 31 lots exchanged, the biggest single-day total since October. The spot price gave up some of yesterday’s gains, slipping 2.5 cents to $2.4050 per pound. CME cheese markets continued to regain lost ground. Blocks rose to $1.9200 per pound, adding $0.0125, while barrels gained a penny to close at $1.8275. One lot of blocks and zero of barrels changed hands.
- The gap between US NDM and New Zealand SMP has narrowed considerably. US product dropped to $1.31 per pound, while New Zealand sits at $1.29. Europe is still the least expensive of the three at $1.18 per pound. US cheese and butter remain at a discount to global prices. At $1.88, US cheese is below New Zealand cheese at $2.28 per pound and EU product at $2.27. US butter at $2.41 is a discount, even when adjusted to equal fat levels, versus New Zealand at $3.20 and Europe at $3.34.
- Inflation still isn’t showing signs of slowing down, with the Consumer Price Index for January increasing more than expected. Prices rose 0.5% month-over-month and +3.0% versus 2024, the biggest monthly rise since August 2023 and the largest annual increase since June 2024. Grocery prices climbed 0.5% on the month and +1.9% year-over-year, while menu prices ticked up 0.3% and +1.8%.
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