Have not found a bottom yet. With an attempted rally early in the week, class 3 futures end lower for the week. Strong production and weaker retail demand has loosened cheese up and the sellers pushed cash cheese to new lows on the year.
Spot Market Recap
Cheese production is active this week, but with the holiday weekend milk handlers are finding it challenging to find a home for all the milk. Spot milk loads are going for $4.50 to $6 under class. Cheese demand remains mixed. Western cheese contracts report slower demand this week. Cheese availability varies from plant to plant. The overall cheese market tone has leaned more bearish this week.
Cream is widely available for immediate butter making needs. Some plant managers plan to pause churns over the holiday weekend. Inventories are stable for the near term. Retail demand is lower but food service continues to improve. Overall butter market is stable at this time.
Dry Whey prices held steady this week as customers are hesitant to take on extra loads. Stocks remain fairly tight and strong demand from exports has kept them that way. Plenty of milk flowing into cheese vats has kept the whey production strong. Overall the whey market is supported.
May finished strong with the NDPSR holding in the 1.80’s. We could see a strong rally in the June class 3 futures this next week if NDPSR does not follow cash lower. Exports should also pick up at the current cash level. I would look to buy some calls this week. Even with futures holding a premium to cash, futures can still rally if it looks like we have put in a bottom. This will create a good opportunity to lock in some profitable numbers. Hope everyone had a safe holiday weekend and give us a call this week for a more personalized trade recommendation.