May 1, 2018

GDT Auction Bolsters CME Cheese Trade

 |  By: Know Your Market

GDT auction results set the tone for the day. The index of the eight products that are traded in this electronic auction was down 1.1%, and that was led by a lower move in whole milk powder, its flagship contract which fell 1.5% in its average price. The lower move was added to by rennet casein which was down 10.5% and anhydrous milk fat which fell 1.9%. Elsewhere, butter remained unchanged in its average price of $2.63 a pound. Butter milk powder, lactose, skim milk powder and cheddar all rose in their trade. Cheddar was up 3.1% to finish at a price of $1.83 a pound. Skim milk powder rose 3.6% to finish at 91 cents a pound.

In the wake of the higher cheddar price, the CME spot trade for blocks and barrels exploded. Barrels rose 11.5 cents on just five trades to finish at $1.6025. Blocks rose 3 cents on a pair of trades to finish at $1.66. In the wake of the softer fat trade on GDT, butter dropped a penny to finish at $2.36, while Grade A nonfat dry milk dropped three cents to finish it at 82.5 cents a pound. Dry whey remained unchanged finishing again at 31 cents.

Class III milk followed a logical path higher, but by afternoon moved back lower with prices finishing down 3 cents in its average from now through the end of the year at $15.96 per cwt.