Butter Stocks Down, Cheese Stocks Up
The broader dairy complex began Wednesday morning trading in line with the bias generated from Tuesday afternoon’s cold storage report. In that report, butter inventories as of July 31 were announced at 307.7 million pounds, a 1% decline from the June 30 number but an 8% reduction from the July 31 2016 estimate.
The multiple categories of cheese all saw an increase and, when combined, total natural cheese inventories were announced at 1.375 billion pounds, a 4% increase from last month and an 8% climb from last year’s numbers.
The lower start in Class III milk and it’s corresponding products together with the higher start in Class IV milk and it’s corresponding products was only perpetuated by the CME spot trade where block cheese dropped 2 cents to $1.70 followed by barrels which fell 6 ½ cents to $1.65 ½ bringing the spread back to a fairly historical norm of 4 ½ cents. And butter rose 4 cents to $2.61 per pound.
Grade A nonfat dry milk rose 1 ¾ cents to finish at 84 ½ cents.
In the end Class III markets would drop 11 cents with a final average price from now through the end of the year at $16.59. Class IV rose 11 cents to an average price of $16.42.