DairyBusiness Update for Nov. 14, 2013
Mielke’s Market Daily
(A daily wrap-up of dairy markets and the things affecting them, from DairyBusiness Update associate editor Lee Mielke)
The cash cheese market saw 40-lb. cheddar blocks jump 1.25¢, to $1.8150/lb., on 4 trades (3 at $1.81/lb. and 1 at $1.8150/lb.). A bid at that price couldn’t find a seller. The 500-lb. barrels held at $1.76/lb., following a 1¢ loss yesterday and 1.25¢ on Tuesday. The spread has widened to 5.5¢. The price slipped as low as $1.7525/lb. this morning before climbing back. Four carloads were traded and a bid at $1.75/lb. went unfilled.
FC Stone market analyst Ryan Cox wrote in this morning’s eDairy Insider Opening Bell: “While it appears the seasonal peak occurred in early October, CME spot cheese prices could see some bumps higher as buyers continue to source product for the year-end holidays and the Super Bowl in February.”
Strong demand is driving the butter price, which jumped 4.5¢ this morning on 4 trades, 1 at $1.62/lb.,1 at $1.63/lb., and 2 at $1.65/lb. This was the fourth consecutive session of gain, and it’s now trading at $1.65/lb., the highest it has been since May 3. One bid at $1.65/lb. went unfilled, and an offer at $1.67/lb. was left on the board.
USDA’s Dairy Market News says “interest for additional loads of butter is higher than expected and churns are busy trying to fill demand. Retail demand from club stores and supermarkets is strong. Cream demand is good from the churns and into Class II manufacturers. Butter stocks are at manageable levels with some producers short of product to meet the extra demand.”
Grade A nonfat dry milk also saw a fourth consecutive day of gain today, marching to $1.9750/lb. on a trade, with 1 bid at that price going unfilled. Extra Grade saw a 3¢ rise on an unfilled bid and hit $1.90/lb., the first movement since last Thursday.
"The $2 level is in everyone's sights," says FC Stone risk management consultant Chris Hildebrand in this morning’s Opening Bell. "We have heard rumblings from others that $2.15 is not out of the question due to continued Asian demand."
Today’s market closing prices:
Butter: up 4.5¢, to $1.65/lb.
Cheddar blocks: up 1.25¢, to $1.8150/lb.
Cheddar barrels: unchanged, at $1.76/lb.
Grade A nonfat dry milk: up 1.5¢, to $1.9750/lb.
Extra Grade nonfat dry milk: up 3¢, to $1.90/lb.
The Agriculture Department issues its monthly Livestock, Dairy, and Poultry Outlook tomorrow afternoon, after the markets have closed for the week. Next week, they markets will have plenty to feed on, starting with the October Milk Production report on Tuesday; federal order Class I base milk price announcement on Wednesday; Livestock Slaughter report on Thursday; and October Cold Storage report on Friday.
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