volatility
February 24, 2017

The Mixed Bag of Markets

 |  By: Know Your Market

By Matt Tranel, risk management advisor, Commodity Risk Management Group

In Thursday’s CME dairy trade, the milk and product markets saw a mixed bag of results. Cheddar blocks were bid 4.75₵ higher and finished the day at $1.5575. Cheddar barrels traded 10 times in total, leaving the market at $1.54, down 3₵. After today’s trade, the spread between blocks and barrels has flipped again with blocks now carrying a 1.75₵ premium to the barrel market.

Wednesday’s block settlement price at $1.51 represented the lowest settlement since June, a time when the market prices lead with $12 and $13. This has been a widely watched spread this month with big moves and changes each way. Butter markets finished 1.25₵ higher on one trade, to end at $2.13. Grade A Nonfat milk closed at 85.25₵ down 1.75₵ on the day.

Class III markets began Thursday’s trade with a weaker tone but was able to fight back to positive territory after cheese traded.  March – June prices traded 5₵-13₵ higher while second half prices finished down a couple of pennies. 2018 markets traded 15₵ lower in January and June, while February declined 3₵ and March was down 11₵.  

Class IV markets saw May and August drop 4₵, while June was down 1₵.

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