Bulging Inventories Chase Production Trend
The USDA released its April cold storage report on Monday with butter and cheese adding to their inventories, which comes as little surprise after the milk production report indicated higher cow numbers and production.
Cheese stocks in April were reported at 1.33 billion pounds, an increase of 42 million pounds since the March report and 125 million pounds more than a year ago. Butter stocks increased 7% from the March report but dropped 1% from last April.
CME product markets on Tuesday saw Cheddar blocks drop ½ cent to $1.64 ½ while Cheddar barrels dropped ¾ of a cent to $1.47 ¼. Butter settled unchanged at $2.36 1/4. Grade A nonfat dry milk gained a ½ cent and closed at 93 cents.
Class III markets softened with May unchanged at $15.60 per cwt while June was down 8 cents. The second half futures closed 3 to 10 cents lower and moved the second half futures average back below $17. February 2018 dropped 5 cents while June was down 6 cents.
The Class IV market had September down 4 cents, December up 5 cents and March 2018 up 14 cents.