Milk Prices
Today, futures reacted to strong offers on the spot auction for block cheddar cheese, which had been a point of strength for seasonally high cheese prices.
The CME butter market continued its pattern of dropping below, then popping back over the $2.40 mark.
Dairy markets weren’t feeling the love today, with both Class III and Class IV mostly moving lower.
Healthy prices combined with sharply reduced feed costs should create profitable margins for most farmers throughout this year.
The softness in butter continues to line up with anecdotal reports that butterfat levels are high and cream is available
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.
U.S. milk production is not off to a record-setting start now that 2025 is underway.
The CME butter market rebounded off its recent lows, climbing to $2.4300 per pound, gaining a nickel.
Much like the Philadelphia Eagles’ dominant Super Bowl victory, the cheese market put up a strong performance today, with blocks and barrels climbing higher in the spot session.
Class III futures tumbled today, erasing the week’s stronger activity following a weaker spot session.
U.S. cheese exports surged ahead in December, totaling 96.7 million pounds.
Class III futures were on a roller coaster with back-and-forth tariff news.
Ramped up conversations around possible 25% tariffs on Mexico and Canada plus 10% tariffs on Chinese goods sent the cheese market sharply lower last night and weakness continued through today’s session.
Dairy cow slaughter rates are well above prior-year levels. For the week ending January 18, culling totaled 58,000 head, up 13.5% on the year.
Class III futures were reluctant to follow several days of green with further higher price action, and showed modest declines or gains depending on the month.
Class III milk futures continued their strong momentum today, with blocks and barrels both posting gains with no offers appearing during the cheese session.
It’s pretty safe to say that the Class III market direction remains unclear.
The market appears to be grappling with uncertainty around Class III prices, particularly as we approach a critical day tomorrow with the release of the Milk Production and Cold Storage reports.
Class III prices continued yesterday’s limit moves, opening red and trading as much as 30 cents lower in nearby months.
After the three-day weekend, spot cheese prices reacted with a series of offers that pushed the entire Class III forward curve downward.
Volatility in futures is one thing but volatility in the spot market is another. The volatility in the futures market is difficult to predict, but volatility in the spot market makes it impossible to predict.
And then there was quiet. After a week of see-saw action in the spot cheese market, Friday’s CME cheddar prices finished unchanged
The volatile trading week for cheese continued today, with both blocks and barrels jumping higher. Class III prices responded positively by climbing through the first five months of the year.
Class III markets took a breather after yesterday’s extreme lower move to check in with spot markets.
Dairy producers are starting the year off with margin pressure following the latest round of USDA reports.
Class III futures rose on the heels of CME cheese, with February and March contracts settling at $20.60 and $20.27 per hundredweight, up 33 and 31 cents, respectively.
It was a rough day for dairy producer margins, as milk prices came under pressure while grain prices rallied.
Milk production forecasts for 2024 and 2025 have been reduced due to lower cow inventories and slower output growth per cow, according to the latest WASDE report.
Despite the decline in CME blocks, nearby Class III contracts ticked higher. February and March futures rose to $20.92 and $20.59 per hundredweight, tacking on six and eight cents, respectively.
Momentum in Class III futures has continued to shift as several weeks of aggressive spot cheese bids and higher futures become adjusted to $1.90 cheese.