If you’re a regular user of Dramamine, this week proved once again that it’s worth keeping a bottle on your desk. Class III prices swung wildly for the second consecutive week. February contracts alone fell $1.21 in the first two trading sessions before climbing back to $18.95 by Friday – still down 48 cents on the week. It’s pretty safe to say that the Class III market direction remains unclear. Reports, however, suggest that though spot milk is a little less abundant than normal in the Midwest, cheese is available for sale in the country. Looking ahead to next week, how will the market digest this afternoon’s Milk Production and Cold Storage reports? Product inventories are in good shape despite US milk production on the lighter side.
Today’s Highlights from Ever.Ag’s Know Your Markets
- CME cheese markets were calm ahead of the afternoon USDA reports. Spot blocks ticked up to $1.8325 per pound, $0.0125 higher, while barrels held steady at $1.8200. Five lots of blocks and one of barrels traded. Butter also regained lost ground, rising to $2.5300 per pound, up $0.0175, with three lots exchanged.
- US milk production reached 18.7 billion pounds in December, down 0.5% on the year and below expectations. Once again, the drop was due to HPAI-affected California, with output down 6.8%. USDA did revise November’s totals for the state from -9.2% to -7.9%. Other regions all showed year-over-year increases.
- USDA’s December Cold Storage report didn’t bring many surprises. Total US cheese stocks reached 1.355 billion pounds, up 1.7% (+23.0 million pounds) on the month and down 6.0% (-87.1 million pounds) versus 2023. That compares to the five-year-average monthly increase of 17.0 million pounds. The butter that disappeared from the November report re-appeared in December, returning stocks to double-digit growth year-over-year. Butter inventories totaled 222.4 million pounds, up 4.1% (+8.7 million pounds) month-over-month and +11.4% (+22.8 million pounds) on the year. On average over the past five years, stocks rose 5.0 million pounds from November to December.
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