Cheese barrels defy norms with 6¢ surge, outpacing blocks in rare market twist. Butter holds steady as powders mix signals.
EXECUTIVE SUMMARY: The CME dairy markets saw dramatic cheese price shifts on April 15, 2025, with barrels jumping 6¢ to a rare 10¢ premium over blocks—a historic inversion signaling urgent processed cheese demand. Butter edged up 0.25¢ on active trading (19 loads), while dry whey gained 1¢ and NDM stalled. Futures markets mirrored cash optimism, with May cheese futures holding a 13¢ premium, though deferred feed costs hinted at margin pressures. Analysts warn the barrel rally’s thin trading volume (1 load) may amplify volatility, urging producers to monitor inverted spreads and traders to verify demand sustainability.
KEY TAKEAWAYS:
- Barrel-block inversion alert: Barrels surged to $1.90/lb (+6¢), creating a rare 10¢ premium over blocks—a potential red flag for market imbalance.
- Butter’s quiet strength: Prices firmed to $2.35/lb (+0.25¢) on robust 19-load trading, suggesting stable inventories.
- Feed cost divide: Nearby corn/soy eased slightly, but deferred corn futures (+2.25¢) signal rising Q4 input costs.
- Futures signal confidence: May cheese futures trade 13¢ above cash prices, anticipating prolonged tightness.
- Actionable insight: Producers should hedge against feed cost risks; traders must confirm barrel demand in follow-up sessions.
Today’s CME spot dairy markets exhibited considerable strength in the cheese complex, with cheddar barrels leading a significant rally that established a rare price inversion over blocks. Meanwhile, butter posted modest gains on active trading volume, and the powder markets delivered mixed results.
The unusual barrel-over-block premium captured market attention as barrels surged 6.00 cents to close at $1.9000/lb, while blocks gained 3.00 cents to settle at $1.8000/lb. This created an atypical 10-cent premium for barrels, a market anomaly suggesting exceptionally strong demand from the processed cheese sector potentially facing tight spot supplies.
CME Cash Dairy Market Closing Prices (April 15, 2025)
| Product | Closing Price ($/lb) | Change from Yesterday (¢/lb) |
| Cheese (Blocks) | $1.8000 | +3.00¢ |
| Cheese (Barrels) | $1.9000 | +6.00¢ |
| Butter | $2.3500 | +0.25¢ |
| Nonfat Dry Milk | $1.1675 | Unchanged |
| Dry Whey | $0.4750 | +1.00¢ |
Weekly Trends Show Sustained Market Strength in Cheese Complex
The broader weekly context reveals even more significant momentum in the cheese market, with barrels outpacing blocks in weekly gains.
Weekly Price Trends
| Product | Current Week Avg. | Prior Week Avg. | Weekly Change |
| Butter | $2.3488/lb | $2.3205/lb | +2.83¢ |
| Cheese (Blocks) | $1.7850/lb | $1.7130/lb | +7.20¢ |
| Cheese (Barrels) | $1.8700/lb | $1.7585/lb | +11.15¢ |
| NDM Grade A | $1.1675/lb | $1.1605/lb | +0.70¢ |
| Dry Whey | $0.4700/lb | $0.4830/lb | -1.30¢ |
This week’s barrel cheese average has surged +11.15¢ over last week, significantly outpacing blocks’ +7.20¢ gain. Butter’s weekly average remains firm at $2.3488/lb (+2.83¢ week-over-week), while dry whey shows mild softness despite today’s gain.
Trading Volume Analysis: Butter Active, Barrels Move on Minimal Volume
Today’s trading activity varied dramatically across products, with butter seeing robust participation while the significant barrel price movement occurred on extremely thin volume.
| Product | Trades | Unfilled Bids | Unfilled Offers |
| Butter | 19 | 3 | 5 |
| Cheese (Blocks) | 7 | 4 | 1 |
| Cheese (Barrels) | 1 | 1 | 0 |
| NDM Grade A | 0 | 1 | 2 |
| Dry Whey | 2 | 1 | 0 |
The butter market demonstrated healthy liquidity with 19 loads changing hands, ending with a balanced bid/offer scenario. Block cheese saw moderate activity with seven trades executed, while notably, the dramatic 6.00-cent increase in barrel prices occurred on just a single transaction. This thin trading volume in barrels, combined with zero offers remaining at the close, underscores extreme market tightness or seller reluctance at current price levels.
Futures Market Signals Strong Expectations for May Contracts
The futures market largely reflected today’s positive cash sentiment, with most contracts increasing. May cheese futures established a significant premium to current cash prices, suggesting traders anticipate continued strength.
Futures vs. Cash Price Comparison
| Contract | Settlement Price | Cash Price | Premium/(Discount) |
| Class III (MAY) | $17.92/cwt | N/A | – |
| Cheese (MAY) | $1.9300/lb | $1.8000/lb | +13.00¢ |
| Butter (MAY) | $2.5100/lb | $2.3500/lb | +16.00¢ |
| Dry Whey (MAY) | $0.4575/lb | $0.4750/lb | -1.75¢ |
May cheese futures trade at a substantial 13.00¢/lb premium to cash prices, signaling expectations of continued market tightness. Similarly, butter futures’ +16.00¢ premium suggests traders anticipate stronger demand as we move into the second quarter.
Feed Cost Outlook: Mixed Signals for Producer Margins
Feed commodity futures presented a mixed picture for dairy producers, with nearby contracts showing modest weakness while deferred contracts displayed varying trends.
Feed Cost Comparison
| Commodity | May 2025 Futures | Dec 2025 Futures | Spread |
| Corn ($/bu) | $4.8350 | $4.6400 | -$0.1950 |
| Soybeans ($/bu) | $1.0325 | $1.0225 | -$0.0100 |
| Soybean Meal ($/ton) | $294.40 | $307.70 | +$13.30 |
New-crop December corn futures trade at a 19.50¢/bu discount to May, suggesting some potential relief in feed costs later in the year. However, soybean meal shows a +$13.30/ton backwardation, presenting a mixed signal for overall feed cost risk management.
Market Sentiment: Bullish for Cheese, Cautious for Butter
The prevailing mood among traders has shifted distinctly positive for cheese while remaining more measured for butter and neutral for NDM.
“The bids were aggressive today, especially for barrels. Buyers are scrambling to cover near-term needs ahead of stronger spring demand.”
— CME cheese trader, April 15, 2025
“While butter firmed, the futures market seems hesitant. We’re watching inventory reports closely, as stocks remain adequate and could cap rallies.”
— Dairy market analyst, April 15, 2025
Strategic Recommendations for Market Participants
For Producers:
Today’s cash and futures strength, especially in Class III components, signals positive momentum for milk prices. The unusual barrel-block relationship, as does the potential for volatility in thinly traded markets, warrants close attention. Consider implementing margin protection strategies that capitalize on the current strength while guarding against potential feed cost increases later in the year.
For Traders:
The upward momentum in cheese appears strong, but the sustainability of the large barrel premium achieved on a very light volume requires careful monitoring. Butter seems more range-bound in the immediate term. Look for confirmation of buying interest in subsequent sessions and follow upcoming USDA reports on production and inventories for further directional cues.
For Analysts:
Investigating the drivers behind the sharp barrel premium over blocks – whether temporary scarcity, logistical challenges, or fundamental demand shifts – will be crucial for understanding market direction. The impact of global price trends and export flows will be critical for assessing the durability of current U.S. price levels, particularly for cheese and milk powders.
Learn more:
- CME Dairy Market Report: April 14, 2025 – Cheese Prices Surge on Active Trading Despite Bearish USDA Outlook, Butter & Powders Remain Static Amid Market Pause
- Dairy Markets Rally on Cheese Surge and Firm Butter Demand Amid Global Supply Constraints
- Trade War Drama Sends Cheese Prices Plunging to 11-Month Lows
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