Inventory Drop Bumps Prices Higher
American's are still eating cheese, or at least that's what USDA had to tell us in the cold storage report from last Friday. Looking at the three different categories, American, Swiss and other (mostly Italian types), all three categories were higher than August of last year but lower than July of this year.
Looking more closely, American cheese had the largest draw down, declining 4% from last month to a total volume of 800.546 million pounds. On the bottom line, total natural cheese fell to 1.33 billion pounds, that was down 3% from July but still registers 7% higher than August 31 of last year.
Perhaps declining volumes brought buyers to the CME spot trade where on Monday block cheese rose 5 3/4 cents to $1.67. Barrels rose 7 1/4 cents to finish at $1.67 1/4, a premium of 1/4 cent over blocks. Butter dropped 3 cents to $2.41 3/4 and that comes even after the USDA showed a 9% decline in inventory from July and a 12% decline from last August.
Grade A nonfat dry milk rose 3/4 of a cent to finish at 83 cents.
All of this news combined for a very good day in the Class III market where 4th quarter prices rose 30 cents to an average price of $16.47.