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Mielke's Market Daily/Week’s End Review

Mielke Market Weekly Review
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
   CME dairy traders anticipating Friday's release of the February Cold Storage report, left cash block cheese at its record high $2.4275/lb., with no activity, but they took the barrels up 1¢, to $2.31/lb. on an unfilled bid.

   The blocks are up 6.5¢ on the week and an astounding 72.75¢ above a year ago. The barrels are down 1¢ from the record set January30, but were up 4.75¢ on the week, 64.5¢ above a year ago, and an unsustainable 11.75¢ below the blocks. It was the 5th consecutive week of gain for spot cheese, and amazingly, there hasn’t been a sale of block at the CME since February20. Eight cars of barrel were traded this week. All eyes are on the precariously high prices, just waiting for the expected reversal.

   FC Stone dairy broker, Dave Kurzawski, wrote in this morning’s Insider Opening Bell that "The futures market is not buying into long-term, $2.40-level cheese prices. That said, I'm not sure we're done going up on block cheese just yet.” Class III futures saw double digit gains, April-Nov., with the April contract up 48¢.

   Butter gained 1¢, following 0.5¢ gains yesterday and Wednesday, and closed the day and the week at $1.92/lb. A bid at $1.92/lb. was unfilled and two offers at $1.95/lb. were left on the board.

   The Grade A butter price had been holding close to $1.88/lb. for three weeks but today’s close is up 4¢ on the week, 8¢ away from the $2 mark, and 22¢ above a year ago. Only two cars were sold this week in the spot market.

   Grade A nonfat dry milk, after holding at $2.04/lb. for 10 consecutive sessions was up 1¢, to $2.05/lb. Four carloads exchanged hands on the day and the week, all at $2.05/lb. A bid at $2.04/lb. was unfilled and an offer at $2.05/lb. got no response.

Friday's Market Closing Prices:
Butter: Up 1¢, to $1.92/lb.
Cheddar blocks: Unchanged, at $2.4275/lb.
Cheddar barrels: Up 1¢, to $2.31/lb.
Grade A nonfat dry milk: Up 1¢, to $2.05/lb.
Class III milk: Mar. $23.29, -4¢; Apr. $23.53, +48¢ (+41¢ on wk.); May $21.74, +46¢ (+23¢ on wk.); & Jun. $20.87, +32¢ (-14¢ on wk.). Based on today’s CME settlements, the Second Quarter 2014 average now stands at $22.05, +42¢ from Thursday. The 2nd half average is now at $19.67, +16¢ from Thursday.