CME: Barrel Price Retraces To Spring Level

US - Tightness of barrel supply in recent weeks has given way to plentiful supply, writes Alan Levitt.
calendar icon 8 December 2011
clock icon 1 minute read

Barrel price fell 4¢ to $1.60 breaking the previous low and retreating back the level last seen on 28 April.

Price declined 11.25¢ so far this week already surpassing the decline last week and the 19 loads traded so far surpassing last week’s total. Blocks stayed steady with no trading activity.

Milk futures were mixed, but mostly lower. Contracts have now virtually erased any discount they were holding to the underlying cash. MAY and JUN have now joined APR in closing below $17.00 leaving six months in 2012 above that level.

Dry whey production during October totaled 76.5 million lbs. according to USDA’s “Dairy Products” report released last week. This was down 1.4 million lbs. from a year earlier reflecting lower cheese production during the month. This is the lowest October production since 1984.

Whey production posted the sixth consective month of decline based on 30-day months (see chart).

Balancing plants are anticipating greater manufacturing milk supply next week. Manufacturers of holiday products will slow production as demand slows and holiday shut downs take place according to Dairy Market News. Current manufacturing supplies are in balance with demand says DMN.

USDA will release their monthly “World Agricultural Supply and Demand” report Friday morning.

Further Reading

- You can view the full report by clicking here.

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