Bids boost block, barrel, butter prices

CHICAGO, IL

Unfilled bids to buy one carload each of Cheddar cheese blocks and barrels on Wednesday of this week in the spot market at the Chicago Mercantile Exchange lifted the prices for those dairy commodities to their highest point since early September of 2015.

Those bids added 5 and 10 cents per pound for blocks and barrels respectively, putting the day's closing prices at $1.58 and $1.66. One carload of blocks was sold on Wednesday.

Similarly, an unfilled bid to buy one carload boosted the AA butter spot market price by 3 cents to $2.33 per pound. Six carloads were sold on the CME earlier in the week.

High NFDM volume

Until the Cheddar cheese bids grabbed the spotlight, the sales volume of Grade A non-fat dry milk provided the highlights for the past week for dairy commodity activity in the spot market on the CME.

Fourteen carloads were sold on Friday, June 24 to boost the week's total to 25 sales. That trend continued into this week with the sales of nine carloads on Monday and seven on Tuesday.

On Wednesday, however, the activity slowed to one carload sale, an unfilled bid to buy one carload and an covered offer to sell one carload as the price slipped by 2 cents to close at 88 cents per pound.

Futures prices rally

The spike in commodities prices anchored significant price gains for the Class III milk futures for nearby months. The new prices suggest a more than $3 per hundred rise in prices from June's approximately $13.25 to the high $16s by August, September, and October. They also prompted a high volume of Class III milk futures contract sales for those months.

Price gains for nearby months ranged from 33 to 45 cents per hundred in early afternoon trading on Wednesday. Prices included $15.45 per hundred for July and $16s for all subsequent months through June of 2018.

Dry whey futures prices have reacted similarly, rising from the 27.85 cents per pound for July to between 30.4 and 37.5 cents per pound for all following months through June of 2018.

The national Class I fluid milk base price for July is $13.70 per hundred. This is an increase of 56 cents from June but it trails the July 2015 price of $16.53.