Markets
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.
Looking back on the past year, we see price improvements in all categories.
Class III milk, which was 20 cents higher in the early trade, extended its gains for February through April.
The Class III market ended the week on a positive note, settling higher through most of the first half.
Class III futures started off the new year with a pop this morning.
On the heels of the CME cheese jump, the January Class III contract climbed to $20.43 per hundredweight, tacking on 31 cents.
Continued lower milk production could significantly change the fundamental outlook of the market. However, the current milk supply is sufficient, leaving buyers comfortable with the current supplies. Dairy cattle slaughter continues to decline.
Following a slow performance in the spot market yesterday, today’s trading saw a bit more activity ahead of the early market close.
In less than two years, dry whey prices have rallied from their all-time low.
Class III futures turned red today on the heels of a quiet spot cheese session.
Today’s spot market witnessed another solid performance on the cheese front, with prices rising to the highest levels in more than a month.
Class III futures continued to climb, taking the lead from the spot cheese markets.
After spending the week gradually easing lower, the CME butter market tumbled six cents to close at $2.4650 per pound.
Supported by upward momentum in spot cheese and whey, Class III and cheese futures jumped.
Some recovery in Class III futures has come just in time for the Q1 2025 DRP deadline on Friday.
Dry whey prices remain buoyant, rising to 73 cent per pound.
Whey led the rally in Class III last week and came out of the gate strong with bids this morning, giving Q1 Class III futures contracts an early pop back over $19.50.