February 4, 2020

Markets Mixed on Global Trade, Bearish Products Report

 |  By: Know Your Market

A busy day of information in the dairy complex on Tuesday. Global Dairy Trade event 253 started the morning with Oceana market showing overall softness with the total index down 4.7%. Individually whole milk powder was 6.2% lower than two weeks prior. Skim milk powder followed suit down 4.2% and anhydrous milk fat was 4.5% below two weeks ago levels. 

Butter however showed a small gain, up 2/10 of a percent to $1.93 per lb. U.S. And the Cheddar index was a bright spot, gaining 6% from the last event. Finally, lactose was up 2.5% and rennet casein finished 6% above the last event. 

The CME spot trade was similarly mixed. Butter fell 2 ½ cents to $1.88 per lb., Cheddar blocks fell half a cent to $1.91 ½, with Cheddar barrels regaining 1 ½ cents to $1.47per lb.  Dry whey was unchanged at $0.36 ½ per lb. and Grade A nonfat dry milk fell 1 ½ cents to $1.21 ½ per lb.

Class III milk saw February gain 11 to $17.03, but the balance of 2020 moved 1-10 cents lower. Our first half average sits at $17.15 per cwt. 

Class IV milk slid lower – February fell 1 to $16.78 and March fell 10 to $16.65.

Our day finished with the USDA dairy products report at 2 p.m. Butter output continues to climb. December saw 177 million lb. of butter produced in the U.S. – the highest December production in nearly a decade. Cheese production only rose 2/10 of a percent over 2018 levels producing 1.11 billion lb. With high prices in December for Cheddar, production shifted into Cheddar vats with and increase in December leading to a 2-year high production of 331.6 million lb., up 1.7% from a year prior.