Cheese and Milk Continue on Separate Paths
It was an active day in the CME spot trade on Thursday where 29 loads of barrels traded. At $1.73 the market remained unchanged but minute after minute buyers continued to appear. This comes one day from the end of the week, the end of the month and the end of the quarter and several corporate year ends. Blocks followed suit by rising 3/4 of a cent on 3 trades, moving to $1.74.
Butter took the opposite direction by falling 3 1/4 cents to settle at $2.38 1/2. Grade A nonfat dry milk dropped 1 1/4 cents moving to 83 cents.
While the cheese market continues to hold its ground, the Class III milk futures stand in disbelief. The average price between now and the end of the year stands at $16.22, down 13 cents. The question for market observers is how will we close the value gap that has been widening in the past couple days between the value of products and the value of Class III milk. Will Class III milk prices rise to meet the value of cheese? Or will cheese fall to meet the value of milk?
In light of the lower butter trade, Class IV markets finished with an average price between now and the end of the year at $15.47, down a nickel.