Barrel Market Falling Quickly
Global Dairy Trade (GDT) event 202 concluded Tuesday with the index dropping 3.9% as a whole. All products that were offered at this event declined in price. Butter, milk powder and lactose weren't offered.
Looking closer at the GDT results, anhydrous milk fat softened 6.7%, butter dropped 2.3% to $1.98 per pound, while cheese dropped 7.9% to $1.53 3/4. Rennet casein was down 6.3%, while skim and whole milk powder weakened 4.8% and 2.5% respectively.
Class III milk futures were unable to find any footing on Tuesday after this GDT event. December 2017 closed at $15.46, down 4 cents. January weakened 9 cents while the remainder of the first half was down 16 to 25 cents. At the close, first half 2018 is now being offered at $14.12 per cwt. Third quarter 2018 softened 11 to 15 cents and fourth quarter prices were down 6 to 9 cents. The full year 2018 average now stands at $14.80 per cwt, down 55 cents from the start of December.
Much of the talk in the product market has surrounded the uncommon spread between the barrel and block markets. After the highly active trade last week in barrels and two days of trading this week, that talk has gone away almost in its entirety. Barrels traded 17 times Tuesday and dropped 10 cents to $1.48 per pound. Through the first two days this week, barrels are down 18 cents on 28 loads changing hands. Blocks lost 4 cents, closing at $1.45 per pound. Butter added a penny to $2.21 while grade A nonfat dry milk settled at 64 3/4 cents, down a quarter cent.