Class III futures came roaring back this week, led by a sizable rally in the cheese markets. USDA’s Dairy Market News reports that domestic cheese demand is perking up. Grocery shoppers have embraced the advent of grilling season with shopping carts full of ground beef and all the fixings for cheeseburgers. However, cheese orders from foodservice outlets remain lackluster. Mexican importers continue to buy U.S. cheese at a healthy clip. But because nearby cheese futures are much lower than deferred contracts, importers continue to book only enough to satisfy short-term needs. Long-term sales commitments are largely off the table. All told, demand is looking a little livelier and there are anecdotal reports that a major cheese processor is short of milk. That was enough to propel CME spot Cheddar blocks to a year-to-date high at $1.68 per pound, up 14.5ȼ since last Friday. Barrels jumped 8.75ȼ to $1.66.
Whey moved higher too. CME spot whey powder climbed 3.25ȼ to 39.25ȼ. Firm demand for higher-protein whey concentrates continues to divert some liquid whey away from driers. But whey powder stocks are ample and export orders remain slow. Other indications of whey powder prices around the nation retreated this week. The spot market rally looks more like a rebound from the lows rather than the start of a more sustained ascent.
April 22, 2024
