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Chicago, Ill. — Gains in the spot market at the CME Group during late October and early November have raised the prices for Cheddar cheese to their highest level since mid-August.

A 13 cent per pound jump for Cheddar barrels on Monday of this week accounted for most of the 20 cent gain during the trading week through Wednesday of this week. A 2.75 cent per pound increase on Wednesday raised the day's closing price to $1.7575 as three carloads were sold during the morning trading session.

Cheddar blocks enjoyed a 7.5 cent per pound gain on Friday of last week en route to a 16.75 cent gain for the Wednesday to Wednesday price comparisons. That included a 2.25 cent gain on Wednesday of this week, which put the closing price at $1.8225 per pound after a trading session with two carload sales and an unfilled bid to buy one carload.

Butter sales surge

After 38 carloads of AA butter were sold in the spot market last week, the trend continued through Wednesday of this with another seven sales to boost the week's total to 13 sales. The price rose by 1 cent to $1.89 per pound on a trading day that also included an uncovered offer to sell three carloads and an unfilled bid to buy one carload.

Grade A non-fat dry milk also posted a 1 cent gain to close at 89 cents per pound on Wednesday. A bid for one carload was not filled and an offer to sell three carloads was not covered. Six carloads were sold earlier in the week.

Class III futures rally

Per hundred gains of more than $1 per hundred for nearby month Class III milk futures accompanied the price uptick for Cheddar cheese during the past week. Those gains lost a bit of ground as the trading session approached mid-day on Wednesday of this week.

Even with those setbacks, the November 2016 futures of $16.31 per hundred was an increase of $1.13 from the closing price a week earlier. The December 2016 price of $16.05 at noon on Wednesday was up by 90 cents from a week earlier.

As a result of the recent price moves, the only months on the trading board with prices below $16 per hundred were January and February of 2017. Those prices were $15.82 and $15.94 respectively at noon on Wednesday. All other months through September of 2018 stood in the $16s per hundred.

Futures prices for dry whey ranged from 34.575 to 38.75 cents per pound for the upcoming 14 months. Trading activity for those futures was being confined to those months.

September milk prices

The weighted all-milk price in Wisconsin for September was $17.90 per hundred. This was a decrease of 10 cents from August. The September average for the United States was $17.30 per hundred – an increase of 20 cents from August.

Among the top 10 milk production states, Texas led the way with its $18.60 price thanks in part to its 3.96 percent butterfat average. Wisconsin's butterfat average was 3.73 percent.

In other states, the September weighted all-milk price averages were $15.74 per hundred in California, $16.20 in Michigan, $16.80 in New Mexico, $17.20 in Idaho, and $17.90 in both Minnesota and Pennsylvania.

The Class III milk national base for October was set for announcement late this week. Based on the final trading session for futures, the price is likely to be a bit over $15 per hundred compared to the $16.39 for September.

Dairy export report

On Monday of this week, Cooperatives Working Together reported the acceptance of a total of 11 bids from Foremost Farms USA, Dairy Farmers of America, the Northwest Dairy Association (Darigold), and United Dairymen of Arizona for financial assistance on the export of dairy commodities.

Those products are 1.784 million pounds of Cheddar and Monterey Jack cheese and 652,568 pounds of butter. They're going to buyers in Asia, the Middle East, North Africa, and Oceania in deliveries scheduled until January of 2017.

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