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Chicago, IL.— Busy trading sessions and small price gains highlighted the first three days of this week in the spot market for dairy commodity products at the CME Group (Chicago Mercantile Exchange).

With a 3.5 cent per pound gain on Wednesday, the Cheddar barrel cheese price rose to $1.7150 – an increase of 12.75 cents from a week earlier. Seven carloads were sold on Wednesday to raise the week's total to 12 sales.

Five carloads of Cheddar cheese blocks were sold on Wednesday to boost the week's total to 14 sales. The price held at $1.7575 per pound – up by 2.75 cents from a week earlier.

Grade A non-fat dry milk ticked up by 2.5 cents to close at 99.75 cents per pound on Wednesday. Seven carloads were sold to put the week's total at 17 sales, a bid to buy one carload was not filled, and an offer to sell five carloads was not covered.

On a market day with an unfilled bid to buy one carload and an uncovered offer to sell one carload, the AA butter price remained at $2.0850 per pound – down by 1 cent from a week earlier. Two carloads were sold earlier in the week.

Futures markets

After posting some single digit per hundred declines for the first quarter of 2017 in early afternoon trading, the Class III milk futures staged a modest upward turn toward the end of the trading session on Wednesday.

Trading prices included $17.33 per hundred for December and prices in the upper half of the $17s for eight months in 2017. The Class III futures stood in the $16s per hundred for all months in 2018.

Futures prices for dry whey also enjoyed gains for several months in very low volume trading on Wednesday. The prices ranged from 39.4 cents per pound for this December to 43.325 cents for December of 2017.

Negative 52 cent PPD

The largest negative producer price differential (PPD) in several years in Federal Milk Marketing Order 30 is likely to reduce the payments to many dairy farmers for the milk they shipped in November.

As announced on Monday, Dec. 12, the PPD in the Chicago base zone for November is a negative 52 cents per hundred. This converts to as a much as a negative 72 cents at the most distant milk receiving plants in Wisconsin.

The negative value of the PPD, which reduced the statistical uniform price to $16.24 per hundred for milk at 3.5 percent butterfat, also had the effect of lowering the volume of milk pooled in Order 30 for November to just over 1.862 billion pounds. When the PPD is favorable, that volume has topped 3 billion pounds in a few months.

As a result of the reduction in pooled milk volume, the percentages of use of the pooled were also quite different for November. Class III usage (cheese production) was down to 68.2 percent, Class I (fluid bottled milk) was up to 15.7 percent, Class II (soft dairy products) was up to 8.9 percent, and Class IV (butter and milk powders) was up to 7.2 percent.

The milk pooled in Order 30 for November had averages of 3.88 percent butterfat, 3.18 percent protein, and 5.72 percent other solids. The relatively high percentages for butterfat and protein could reduce a portion of the effect of the negative PPD on some milk checks for the month.

Dairy export report

On Tuesday of this week, Cooperatives Working Together announced the receipt of requests for financial assistance on 13 contracts to export dairy products. Those requests came from Dairy Farmers of America, the Northwest Dairy Association (Darigold) of Washington, and United Dairymen of Arizona.

The products being exported are 2.518 million pounds of Cheddar and Monterey Jack cheese and 440,925 pounds of butter. They are going to buyers in Asia, North Africa, the Middle East, and Oceania on deliveries scheduled until March of 2017.

National milk production statistics for November will be released on Tuesday afternoon, Dec. 20.

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