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CHICAGO, IL

With the price gains on Wednesday of this week at the Chicago Mercantile Exchange (CME), dairy commodity and futures have reached their high points in trading conducted during 2016.

AA butter led the way on Wednesday with a jump of 8.25 cents to close at $2.3550 per pound. The price rose as two carloads were sold during the day's trading session.

Grade A non-fat dry milk did not follow the trend on Wednesday as 9 carloads were sold to put the week's total at 12 sales, a bid to buy one carload was not filled, and an offer to sell one carload was not covered. The price fell by 2 cents to close at 83 cents per pound, which was nonetheless a 4.5-cent increase from a week earlier.

Cheese prices advance

Cheddar cheese prices joined in the upward trend on Wednesday with respective gains of 2 cents and 1.75 cents for blocks and barrels to put the day's closing prices at $1.54 and $1.55 per pound. Those were increases of 6.5 and 4 cents respectively during the first three days of this week.

The Wednesday trading session included the sale of four carloads of blocks and an unfilled bid to buy one carload. Transactions in the barrel market were the sale of two carloads, an uncovered offer to sell one carload, and an unfilled bid to buy one carload.

Futures markets

Class III milk futures enjoyed a 55 cent per hundred bump for July to put the early afternoon trading price at $15.47. That's major jump from the $13.28 that was on the trading board for June. Traders reacted to the prices with nearly 800 contracts for July by early afternoon on Wednesday.

At more than $16 per hundred, the Class III futures for August through November of 2016 represented increases of up to $2.60 per hundred from only a month ago. Wednesday's trading prices were in the $15s per hundred for December 2016 through June of 2017 before rising into the low $16s for the latter half of 2017.

Defying the trend, dry whey futures for the summer months of 2016 were in red ink territory on Wednesday, leaving June with a trading board low of 25 cents per pound. After that, they rise to 32 cents per pound by the end of 2016 and to slightly over 34 cents for all months in 2017 from April through December.

May PPD at 32 cents

The producer price differential in the Chicago base zone of Federal Milk Marketing Order 30 for May is 32 cents per hundred. Because of the transportation deduction, it is 12 cents for the most distant milk receiving plants in Order 30.

Milk volumes pooled in the Order continue at very high levels, reaching nearly 3.165 billion pounds for May. Usage of the pooled milk was 8.9 percent in Class I (bottled fluid milk), 1.7 percent in Class II (soft dairy products), 88.4 percent in Class III (cheese), and 1 percent in Class IV (butter and milk powder). The pooled milk had averages of 3.78 percent butterfat, 3.08 percent protein, and 5.76 percent other solids.

Milk production statistics for May will be released on Tuesday afternoon, June 21.

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