USDA released its July Cold Storage on Friday after market close. Butter storage data was bullish according to our Insights team, highlighted by a larger-than-expected drawdown of stocks that increased the year-over-year deficit. Despite that, spot butter started this week with just a small move upward. Cream remains relatively inexpensive and butter production has been strong, so the storage decline might suggest healthy demand. While spot butter only rose a half cent, futures contracts added between a penny and a nickel, which could signal more increases at the CME in the coming days.
Blocks were the biggest mover to start the week, climbing 4.5¢ to $1.795 per pound with nine lots changing hands. Barrels held at $1.76 with no trades. Butter inched up a half cent to $2.24 per pound, with three lots exchanged. Nonfat dry milk eased slightly, down a quarter cent, to $1.2575. Five lots traded. Dry whey gained 1.5¢ to close at 7¢. One load traded.
Following spot blocks, fourth quarter Class III milk futures settled higher at $17.86 per hundredweight, up 12¢. The September “all cheese” contract also gained ground, ticking up to $1.8790 per pound, a 1.5¢ gain. But November and December moved in the opposite direction, closing at $1.819 and $1.796 per pound, $0.001 and $0.004 lower, respectively.
USDA’s Crop Progress report indicated U.S. crops remain very healthy. As of Aug. 24, 71% of the U.S. corn crop was in good or excellent condition, unchanged on the week and well ahead of the five-year average of 59%. Soybeans were 69% good or excellent compared to 68% last week and 60% on the five-year average.
Your Next Read:
U.S. Dairy Herd Continues to Grow: Fastest Pace in 17 Years
