Barrels Close Higher Than Blocks
Light volumes in the CME spot dairy product sessions and Class III milk futures markets kicked off the week on Monday.
Butter traded just once after a very active last week and dropped a penny and ¾ cents to $2.62 3/4. Grade A nonfat dry milk finished unchanged at 83 ¼ cents.
For the first time since March 15, 2017 the block to barrel cheese spread has now become inverted and favors a 1 ¾ cent premium to the barrel market over its block counterpart. Blocks at one point held a 25 cent premium over barrels.
Barrels improved a penny Monday to close at $1.76 per pound while blocks declined 1 ¼ cents to $1.74 ¼.
Class III milk futures began the day in a softer manner following Friday’s bearish milk production report and continued weaker throughout the session. August moved a penny higher while September through December fell 7 to 14 cents per cwt. January and February finished 11 and 8 cents lower respectively while September 2018 was up 5 cents. Class IV markets saw November trade 21 cents lower.
The Farm Journal Midwest Crop Tour kicked off today and will continue through Thursday and end in Minnesota. As crop scouts visit corn and soybean fields in Indiana, Illinois, Iowa, Nebraska and Minnesota we will get a better look at the variability that has been talked about all growing season. If in fact yields come in where USDA pegged its August yield number, cheap feed will be available for dairy producers.