Barrels Continue Roller-Coaster Ride
Of late the most interesting product in the CME spot trade has been the barrel Cheddar contract. On August 1, trade settled at $1.66 after a three-day run that began at $1.46. One week later, on August 8, spot barrels finished back at $1.51. A week later, barrels rose 7 cents and finished at $1.65 ¾, a ¼-cent off the August 1 finish and the second highest close since back in February.
That closed the gap between blocks and barrels to 9 ¾ cents after blocks finished 1 ¼ cents higher to $1.75 ½. Last week the block/barrel spread was able to tighten to 8 ¾ cents for a single day before widening back to 15 cents, so today’s move to 9 ¾ represents the second narrowest spread since mid-May, but still 6 to 7 cents wider than its historical average.
Butter finished down 1 ¼ cents to $2.67. Grade A nonfat dry milk was unchanged at 85 cents per pound.
Despite the impressive move in barrels the Class III price couldn’t get much done. Prices finished up 2 cents on the average price from now through December at $17.03. Class IV markets were unchanged at $16.75 for the same period.