Correspondent
CHICAGO
Some recent trading sessions have been very busy but prices for Cheddar cheese continued on a downward trend on the Chicago Mercantile Exchange (CME) into the second week of March. The spot market price of Cheddar blocks, for instance, fell from $1.72 per pound in mid-December into the high $1.20s by the end of the first week of March.
Some of the highest trading volumes ever on the CME were recorded on Tuesday of this week with the sale of 17 carloads of Cheddar barrels, 10 of blocks and 12 of AA butter. This followed sales of seven carloads of barrels, two of blocks and three of butter on Monday of this week.
The cheese market quieted on Wednesday of this week with the sale of one carload of blocks, unfilled bids to buy five carloads of barrels and one of blocks, and an uncovered bid to sell one carload of blocks. As a result, the day’s closing prices held at $1.2750 per pound for blocks and $1.25 for barrels.
Those prices have been almost fully reflected in the Class III milk futures prices for nearby months. Following the $14.28 per hundred cash price for February – up by $4.97 from a year earlier – announced last week Friday, the respective futures prices in trading late on Wednesday morning of this week for March, April and May were $12.82, $12.64 and $12.96 per hundred after modest gains for the day.
June’s futures stood at $13.63, July and August in the $14s, September and October at $15.10 and all subsequent months through June 2011 in the $14s per hundred. Prices for July 2011 through February 2012 were holding in the $15s per hundred.
The AA butter market continues to run counter to the cheese trend, however, with minor price increases during all trading days since March 1. That trend continued on Wednesday of this week with another 0.50 cent increase for a closing price of $1.4850 per pound after a trading session of nine carload sales, an unfilled bid to buy two carloads and an uncovered offer to sell one carload. The spot market price for butter has risen from $1.4050 at the end of February.
Another downside influence on the milk price is the dry whey futures market. On Wednesday of this week, the price for March was 37.75 cents per pound but it gradually tailed off to 28.75 cents for February 2011 and a low of 25.50 cents for May 2011 before posting a modest increase.
Dairy market announcements scheduled within the coming week for February are the national milk production report and the producer price differential in the Federal Milk Marketing Order 30, which covers most of Wisconsin and portions of adjacent states.
