January 12, 2018

Barrel Price Lowest Since 2009

 |  By: Know Your Market

The Cheddar barrel market experienced a very rough day to finish out the week on Friday. After sellers lined up in a very substantial way, 20 loads traded and dropped the barrel market 7 1/4 cents to $1.21 3/4. Not only did the market take out the previous low of $1.27 back in May 2016, it destroyed that price. The last time that barrels have seen their current price is July of 2009. 

Blocks fared better that its counterpart on Friday. Blocks gained 1 3/4 cents after two trades and three bids to move to $1.45 1/2 per pound. The spread between blocks and barrels has extended to 23 3/4 cents. Butter gained a half cent to $2.16. Grade A nonfat dry milk fell a 1/4 cent to 66 3/4 cents per pound. 

Despite the bloodbath in the barrel market, CME Class III milk held itself together fairly well. January through July 2018 fell 5 to 15 cents per cwt while August through December ranged from 3 cents lower to a penny higher. Class IV milk had February down 3 cents, December fell 3 cents and January 2019 was down 19 cents. 

The January Supply and Demand report on grains was also released Friday. USDA raised corn yield to 176.6 bushes per acre, a new record, and raised ending stocks 40 million bushels to 2.477 billion. Soybean yield decreased 0.4 bushels to 49.1 bushels per acre but ending stocks jumped 25 million bushels to 470 million.