Strong Global Trade Bleeds Over to CME Product Markets
Global Dairy Trade event number 227 took place on this first business day of the year. Prices of the 9 products offered in that auction were all higher with the exception of sweet whey powder which did not trade. However, as we look at butter, prices there rose 3.9% to finish at $1.81 a pound. Cheddar values rose 3.2% to finish at $1.53 a pound. Skim milk powder rose 7.9% to finish at $1 a pound while whole milk powder rose 1.2% to finish at $1.23 per pound.
All in all the index of products rose 2.8%. This being the third auction in a row where prices rose over the previous offering, it sets a fine tone to the start of 2019.
The strength in powder on the global dairy trade bled over into the CME spot session where Grade A nonfat dry milk rose 1 1/4 cents to 95 cents with two loads trading hands. That is the highest price that's been witnessed at the CME spot trade since the end of May 2017 when prices peaked out at 95 1/2 cents. Barrel cheddar followed suit rising a 1 1/4 cents also on four loads. It finishes at $1.30 1/4 whereas block cheddar moved the opposite direction, dropping 1 1/4 cents to finish at $1.41 3/4. Butter remained unchanged at $2.21 3/4 and dried way like butter did not trade and finished unchanged as well at 48 cents.
Class III markets were mixed in their performance with the average price covering the first half of the year finishing at $15,24. Class IV markets saw stronger performance with the average for the first six months of the year coming in at up 7 cents over Monday.