Blocks Rally to Close Gap
December 2017 is one for the record books. Regarding the record large premium that barrel cheese has held over block cheese in recent days, there was a correction made on Thursday. Block cheese rose 7 1/2 cents to finish at $1.53, driven all on bids, 11 of which remained at the end of the session. Barrel cheese took the opposite approach, remaining unchanged after 11 loads traded, finishing at a price of $1.67, which is still 14 cents over the block market.
Butter had a good day as well, rising 4 3/4 cents to $2.26 per pound. Nonfat dry milk finished at 66 1/2 cents, which is now the third consecutive day that the market has made new contract lows not just for the year, but for the entire 15 year history that the product has been trading on the spot call session at the CME.
Immediately following the higher block cheese trade, Class III markets responded in earnest. January milk at its high for the day was up 43 cents, topping off at $14.93 before drifting back to a $14.70 finish. Its movement was paralleled in the months that followed. At the end of the day the average price for the first half of 2018 was up 10 cents to $14.74. The whole year of 2018 rose 6 cents to finish at $15.17. Despite the higher butter trade Class IV markets saw very little activity and rose a few cents in nearby months but fell as much as 40 cents in contracts offered in 2019.