CME block Cheddar climbed to $1.76 per pound on Halloween but closed Friday at $1.7150 per pound, as traders absorbed the mostly bearish September Dairy Products report, down 3 cents on the week, 18 1/2-cents below a year ago, and compares to $1.7275 on the first trading day of October.
The barrels also finished at $1.7150, up a penny on the week, 14 1/2-cents below a year ago, but 2 1/2-cents above their Oct. 2 perch.
The blocks dropped 2 1/4-cents Monday and plunged 6 cents Tuesday, to $1.6325, as traders studied the GDT.
The barrels were unchanged Monday but rolled a penny and a half lower Tuesday, to $1.70, 6 3/4-cents atop the blocks.
Dairy Market News reports that cheese demand has ebbed slightly for some Midwest cheesemakers. Western cheese production is steady, supplies are substantial, but not causing major concern. International sales are good and manufacturers hope that will help reduce inventories.
Cash butter fell to $2.2225 last Thursday but closed Friday at $2.2325, down 7 cents on the week and 34 cents above a year ago.
The butter slipped three-quarters Monday and lost a penny and a half Tuesday, slipping to $2.21, lowest price since May 10, 2017.
Cream continues to be available for Central butter producers and is finding its way to upper Midwestern churns from across the nation. Contacts suggest weakening European butter markets are bringing U.S. prices down.
Cash Grade A nonfat dry milk closed Friday at 72 cents per pound, down 3 cents on the week and 12 3/4-cents below a year ago.
The powder inched up three-quarters Monday but fell a penny and a half Tuesday, to 71 1/4-cents per pound, lowest spot price since April 12, 2016.
GDT drops 3.5 percent
Tuesday’s Global Dairy Trade auction saw its weighted average for products offered drop 3.5 percent, following a 1.0 percent decline Oct. 17 and a 2.4 percent descent Oct. 3.
Whole milk powder led the declines, down 5.5 percent, following a 0.5 percent loss Oct. 17. Butter was down 3.6 percent following a 2.5 percent dip in the last event. Cheddar was off 2.8 percent, after inching 0.1 percent lower last time.
Skim milk powder was up 1.2 percent, after plunging 5.6 percent, and anhydrous milkfat was up 0.5 percent, after it jumped 5.2 percent last time.
FC Stone equated the GDT 80 percent butterfat butter price to $2.4412 per pound U.S. CME butter closed Tuesday at $2.21. GDT Cheddar cheese equated to $1.8146 per pound U.S. and compares to Tuesday’s CME block Cheddar at $1.6325. GDT skim milk powder averaged 82.48 cents per pound and whole milk powder averaged $1.2937. CME Grade A nonfat dry milk price closed Tuesday at 71 1/4-cents per pound.
Benchmark up 33 cents
The nation’s October benchmark Class III milk price climbed to $16.69 per hundredweight, up 33 cents from September and $1.87 above October 2016. It is the highest Class III since February 2017 and equates to $1.44 per gallon, up from $1.27 a year ago. The 10 month Class III average is at $16.19, up from $14.42 a year ago and compares to $15.98 in 2015.
The November Class III futures contract was trading late Tuesday morning at $16.45 and December was at $15.45, with nothing above $16 until September 2018.
The October Class IV price is $14.85, down $1.01 from September but $1.19 above a year ago, and the lowest Class IV since May 2017. Its average stands at $15.44, up from $13.65 a year ago and $13.97 in 2015.
California benchmark up
California’s October Class 4b cheese-milk price is $16.17 per cwt., up $1.29 from September, $1.74 above a year ago and 52 cents below the comparable FO Class III price. Its 10-month average stands at $15.33, up from $13.72 a year ago and $14.63 in 2015.
The Class 4a butter-powder price is $14.51, down 18 cents from September, $1.40 above a year ago, but the lowest 4a price since May 2017. The 4a average now stands at $15.24, up from $13.25 in 2016 and $13.81 in 2015.
Dairy products report
USDA’s latest Dairy Products report was more bearish than expected and showed total cheese output at 1.01 billion pounds, down 1.4 percent from August but 2.7 percent above September 2016. Year to date output stands at 9.25 billion pounds, up 2.6 percent from a year ago.
Mozzarella, at 334 million pounds, was up 0.2 percent, with YTD at 3.1 billion pounds, up 0.9 percent.
Total American cheese fell to 393.8 million pounds, down 1.3 percent from August but 4.2 percent above a year ago. YTD, at 3.7 billion was up 3.4 percent.
Cheddar, the kind traded at the CME, totaled 282.8 million pounds, down 0.4 percent from August, but 4.5 percent above a year ago, with YTD at 2.7 billion pounds, up 4.6 percent.
U.S. churns produced 134.8 million pounds of butter, up 2.8 percent from August but 0.3 percent below a year ago. YTD totaled 1.38 billion pounds, up 0.7 percent
Dry whey totaled 91.3 million pounds, up 20.8 percent, with YTD hitting 788.6 million pounds, up 9.6 percent. Stocks were up and HighGround Dairy’s Eric Meyer called it “the most bearish statistic of all,” as dry whey inventories stand at a record 105 million pounds, up 107.5 percent (more than double) last year.
Nonfat dry milk output totaled 133.4 million pounds, down 1.5 percent from August but 6.2 percent above a year ago, with YTD at 1.38 billion pounds, up 3.4 percent.
Skim milk powder totaled 30.4 million pounds, down 33.6 percent from August and 21 percent below a year ago. YTD output is at 417.2 million, up 0.4 percent.
September nonfat dry milk stocks hit 321.1 million pounds, up 8.2 million pounds or 2.6 percent from August and 10.5 million pounds or 48.6 percent above a year ago.
Source: Capital Press, Lee Mielke