Prices weak in dairy markets
Prices for dairy commodities in both the spot market on the Chicago Mercantile Exchange (CME) and in the Global Dairy Trade auction market based in New Zealand continued to show weakness in trading through the first half of this week.
Cheddar cheese prices on CME slipped on Wednesday with blocks losing 2 cents to close at $1.48 per pound and barrels shed .25-cent to close at $1.4950 per pound. Both changes were as a result of an uncovered offer to sell one carload.
AA butter activity
After a couple of volatile trading days, the AA butter spot market price held at $2.1325 per pound after Wednesday's market session of an unfilled bid to buy one carload and an uncovered offer to sell one carload.
The CME's spot market price for butter jumped by 21.5 cents per pound during the final three trading days last week but, following the Martin Luther King federal holiday on Monday, fell by 11.75 cents per pound on Tuesday of this week.
That price setback might have been linked to the 5.9 percent drop for butter in the Global Dairy Trade bi-weekly auction earlier on Tuesday. Winning bids for dairy commodities in that auction fell by an average of 1.4 percent, including 3.4 percent for Cheddar cheese and 3.2 percent for skim milk powder.
On the CME, the Grade A non-fat dry milk price stood at 74.25 cents per pound on Wednesday. One carload was sold and a bid for one carload was not filled.
The Class III milk futures markets for all months of 2016 reflected the price trend in the commodities markets. Except for having the January price hold at $13.75 per hundred, the futures prices were down by single digit or low double digit numbers for all other months in the year in early afternoon trading on Wednesday.
Class III futures prices were also in the $13s per hundred for February through April before rising gradually into the $15s per hundred for the latter half of 2016. With minimal trading, they stood in the high $15s or low $16s for all months of 2017.
Dry whey futures are showing very little price movement. They were at very close to 23 cents per pound through May of 2016, did not reach 30 cents until February of 2017, and had a high contract price of 32 cents per pound for October of 2017.
On Tuesday of this week, Cooperatives Working Together announced the receipt of a total of 9 bids from Dairy Farmers of America, Michigan Milk Producers, Northwest Dairy Association (Darigold), and Tillamook County Creamery of Oregon for financial assistance on the export of dairy products.
Those products are 1.543 million pounds of butter, 766,547 pounds of Cheddar, Gouda, and Monterey Jack cheese, and 110,231 pounds of whole milk powder. Buyers in countries in Asia and the Middle East are scheduled to receive shipments until July of 2016.
Milk production statistics for December in the United States will be announced in mid-afternoon today (Friday, Jan. 22).