A relatively quiet week after the past couple of weeks. With Thanksgiving in the rear view mirror and Christmas right around the corner, the retail market is restocking in preparation. Food service also has strong demand, but with Covid back in the headlines with the first case of the new variant found on the west cost. There is some concern that restaurant demand could slow.
Weekly Spot Prices
Weekly Future Prices
Cheese production is running active schedules with milk production picking back up as the weather has cooled. Both retail and food service demand are strong and cheese plant managers are comfortable with current cheese inventories. In the Midwest some cheese plants were down for the Thanksgiving and are now playing catch up as the milk production has been steady from week to week. International demand is strong with notable purchases to export cheese to the Asian markets. Transportation continues to limit the number of export orders that can be filled. Cheese market tone this week is supported to bullish.
Butter, cream demand continues to be strong as butter production continues on full schedules. Bulk butter remains tight as strong demand from both retail and food service has drawn down inventory levels. Export demand has remained strong even with delays in shipping. On the West coast cream is more available and surplus loads are being sold to the Midwest region although trucking shortages has made it difficult to move some loads. Spot loads of bulk butter is running 3 to 15 cent over class. Butter market tone is bullish.
Dry whey prices have shifted higher across the range. Demand is steady in the domestic market and in the export market. Dry whey inventories are tight even with transportation issues limiting exports. Dry whey production is strong as more milk it running through cheese plants. Most drying operation are concentrating on higher protein concentrates and permeate, as those products have the highest profit margins. Dry whey market tone is bullish.
Strong rebound this week as most of 2022 class 3 futures is pushing into the 19s. We did not see the sell off on Friday as we have seen in previous weeks leading to some months to put in new contract highs. The overall market tone is bullish. Recommendation this week is to buy puts as the market pushes higher. If you have already sold your milk look to buy calls or call spreads on pull backs. Have a good week, and if we can help with your marketing needs give us a call.