Mixed prices in CME spot market

Ray Mueller
Now Media Group


Prices on the Chicago Mercantile Exchange's (CME) spot market for dairy commodities were mixed in the trading week through Wednesday of this week as Cheddar cheese and non-fat dry milk posted small gains while the AA butter price dropped slightly.

On Wednesday of this week, Cheddar cheese blocks picked up 2 cents per pound to close at $1.49 after a market session with eight carload sales and an unfilled bid to buy one carload. In a market that's been quiet, the Cheddar cheese barrel price stood at $1.4650 per pound.

The AA butter price has been more volatile in recent trading sessions, reaching a high of $2.20 per pound on Thursday, Feb. 4 before retreating to $2.1250 at the end of the trading session on Wednesday of this week. The price dropped by 1 cent on a sale of one carload on Wednesday.

The Grade A non-fat dry milk spot market remained active with transactions on most recent trading days. The price rebounded by 2 cents per pound to 75 cents on Wednesday thanks to an unfilled bid for two carloads.

Dairy futures markets

Class III milk futures posted single digit per hundred gains for March through September of 2016 in trading through early Wednesday afternoon. Trading prices were on a upward arc from the low of $13.78 per hundred for February to $15.77 for all three months in the final quarter of 2016.

Futures prices also stood in the mid to upper $15s per hundred for all months in 2017. The only $16 per hundred price on the board on Wednesday was for January of 2018.

Similarly, dry whey futures prices rise from a low of 24 cents per pound for February 2016 to a high of 30.50 cents for February of 2017. They are then locked at 27.5 cents per pound for the final 10 months of 2017.

Class III prices

The national Class III milk base price for January is $13.72 per hundred. This is the lowest price for any month since the $13.48 in January of 2011. In January of 2015, the Class III or cheese milk price was $16.18 per hundred.

On Monday of this week, Cooperatives Working Together announced the receipt of a batch of five bids from Dairy Farmers of America, Michigan Milk Producers, and Northwest Dairy Association (Darigold) for financial assistance on the export of 4.133 million pounds of whole milk powder and 101,413 pounds of Cheddar and Gouda cheese. Those products are going to buyers in Asia, Central America, and South America in shipments to be completed by July.