Discover why cheese and butter prices plunged after the holiday weekend. Can the dairy market recover from this bearish trend? Read on to find out more.
Following the extended holiday weekend, the dairy markets commenced the week on a bearish note. Block cheese prices experienced a decline due to reduced offers, while offers for barrels remained stable. However, the lack of sufficient bids to counter the decline led to a drop in prices. The butter market, in particular, faced challenges, reacting unfavorably to the Cold Storage report from the previous week. This report revealed a substantial increase in inventory, which consequently pushed butter futures down, rendering carry trades unprofitable. With the holiday shortening the trading week, the future trajectory of the markets and prices remains uncertain.
Following the release Of the Cold Storage report, the butter market experienced a significant shift. The report revealed a notable increase in butter stocks, leading to a drop in spot butter to $3.0025 per pound, down 12 cents, with three lots traded. Blocks also fell to $1.8625 per pound, down $0.0075. Meanwhile, barrels stayed steady at $1.9800 per pound. This report’s influence on the market dynamics is crucial for our audience to understand and navigate the current market conditions.
The Cold Storage report had a significant impact on butter futures. June to December butter futures dropped to the day’s limit, experiencing a decrease of 7.5 cents. Third-quarter contracts also saw a decline, falling to $3.0895 per pound. Q3 Class III futures mirrored this trend, dropping $19.58 per hundredweight, losing 40 cents since the previous Friday’s trade.
Ideal conditions helped rapid planting progress:
- The week ending May 26 saw corn planting advance to 83% complete, just behind last year’s crop, which was 89% planted by this time.
- Soybean planting is now reported to be 68% finished but still behind last year’s crop, which was 78% planted at this time.
Key Takeaways:
- Block Cheese Prices: Declined amid lower offers, while barrels maintained steady offers but lacked sufficient bids to prevent the drop.
- Butter Market Challenges: Reacted negatively to last week’s Cold Storage report, revealing a significant inventory increase.
- Spot Butter Prices: Fell to $3.0025 per pound, down by 12 cents, with three lots traded.
- Block Cheese Prices: Dipped to $1.8625 per pound, a decrease of $0.0075.
- Barrel Cheese Prices: Held steady at $1.9800 per pound, with no exchanges.
- Butter Futures: June to December butter futures settled limit down (-7.5 cents), affecting market profitability.
- Q3 Contracts: Dropped to $3.0895 per pound, with Q3 Class III futures decreasing $19.58 per hundredweight.
- Agricultural Impact: Ideal conditions advanced corn planting to 83% complete, while soybean planting reached 68%, trailing last year’s pace for both crops.
