Monday’s Inversion Trade Hammered Milk Markets
There has certainly been no shortage of excitement for anybody -who has been following the spread between block cheese and barrel cheese. Just last week we spoke of the near record 24 cent spread between blocks and barrels. In a matter of six sessions, that record spread moved to an inverse spread, with barrels finishing a penny over blocks in Monday’s spot session. We have not seen that phenomenon occur since last August, a result of a rally that began on a contrived barrel cheese shortage. This spread comes at an interesting time and will indeed require some more attention.
Looking to the other products, butter and powder markets were both quiet. Butter saw no change to its price, finishing at $2.1575 with neither a bid nor offer tendered. Powder markets remained unchanged as well with a bid and an offer remaining on either side of the market. Powder prices finished at 94 cents.
As we turn our attention to the Class III markets, Monday’s inversion trade did us no favors. The months March and April milk were down nearly 30 cents. The months of May, June and July were all down about 15 cents. The balance of the year remained unchanged to slightly lower. Five months of the Class IV markets traded, all of which were lower with June the exception, remaining unchanged.