August 23, 2019

Butter Markets Melt Over Inventory Report

 |  By: Know Your Market

Friday’s butter market reacted strongly to Thursday’s cold storage report, as USDA showed July 31st inventories had an unseasonal increase over June stocks. We saw the CME spot butter trade fall 6 ¼ cents to $2.22 ¾ but only 1 load traded with 1 bid and 2 offers remained. The weekly average for butter finished at $2.29 ½, only 4 cents off last week’s average. 

The spot cheese market was unchanged. Cheddar blocks held at $1.88 with 2 loads trading and barrels ended at $1.66 ½ with 5 loads moving from seller to buyer.  Grade A Nonfat Dry Milk was our lone product to move higher, gaining a penny to $1.03 ¾ with 21 of its 29 weekly loads moving during Friday’s trade. Dry whey was unchanged and failed to move a load at $0.39 ½ /lb.

Class IV milk felt the brunt of the fall in butter. August was unchanged at $16.66, September fell 23 cents to $16.30 and October fell 15 to $16.48/cwt. The August -December average is at $16.53.

Class III milk continued it’s slide lower. August was the outlier, gaining 2 cents to $17.59, September lost 1 cents to $17.22, and October fell 6 to $17.40/cwt. The markets in 2020 were more stable, with Jan and February unchanged and March off 2 cents. Our Jan- March average is at $16.34 /cwt.

Opportunities to secure cheaper feed options continue with another announcement of Chinese tariffs on Friday morning. December corn fell 3 ¼ cents to $3.67 ¾, November soybeans fell 12 ¼ to $8.56 ½, and September soybean meal fell $3.80 to $289.90/ton.