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CME: Cheese Markets Getting Support

06 January 2012

US - Buyers are returning to the spot market. Blocks gained 3¢ today, sending milk futures higher, writes Alan Levitt.

FEB (+29¢) and MAR (+32¢) Class III futures posted large gains, and APR-JUN also logged double-digit increases. Spot butter traded a half-cent higher as well.

Oceania cheese prices are firm, according to Dairy Market News’ biweekly survey. Export prices for cheddar are $1.67-$2.04, up about 6¢ from the previous report, and the highest since mid-October (see chart).

“Stocks of cheese [in Oceania] are adequate for commitments, with suppliers and handlers comfortable with their supply/demand situations,” says DMN.

“Many manufacturers and handlers are indicating that cheese order books are in good shape and within budget.”

Weekly whey survey prices jumped this week: Central dry whey is mostly 68.5¢-70¢, says DMN, up 3.75¢ from last week at the midpoint of the range. “Many manufacturers indicate their contracted quantities for this production year are closely aligned with total dry whey production projections,” the report explains.

“Because of that, manufacturers forecast offers of spot market loads throughout the year will be intermittent, at best.”

Nonfat dry milk prices, on the other hand, continue to slump. “Buying interest is generally light and … spot interest is limited for some fill-in needs,” DMN says.

“Additional export potential is in the marketplace as buyers look to secure 2012 needs. US offering prices are often being reduced to be competitive with international pricing.”

Further Reading

- You can view the full report by clicking here.


Daily Dairy Report - Copyright © 2008 CME. All rights reserved.


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