A strong day in the dairy markets on Wednesday, cash cheese barrels gained 7.25 cents and blocks increased 2.75 cents on a couple of unfilled bids. Grade A nonfat dry milk added 1.25 cents on an unfilled bid as well. Class III futures responded accordingly, December passed the $19 mark gaining 37 cents to close at $19.23; January increased 32 cents to $18.72 in fact there were double-digit increases through September, 2014.
A couple of factors driving the market; first we had the U.S. Dairy Export Council report that U.S. dairy exports for the first nine months of the year are $4.92 billion, 26 percent ahead of a year ago.
Then on Tuesday, the Global Dairy Trade auction saw overall prices increase 3.9 percent, the biggest jump since July 16th. HighGround Trading noted two weeks ago Fonterra offered a record-amount of whole milk powder at the auction and prices nudged fractionally higher. This week they offered a new record, 22,500 metric tons and still prices jumped. HighGround says it is clear “Chinese supply shortages and pent-up global demand have hit the marketplace all at once.” They go on to say in the near term, “sellers are willing to hold on to inventory while buyers appear willing to pay up to secure supplies.”
November base milk prices Class II $20.76, up 20 cents from October and $1.95 above November of 2012. The Class III base is $18.83, up 61 cents from October but $2.00 below a year ago. Class IV base is $20.52 per hundredweight up 35 cents for the month and $1.86 above a year ago. Components per pound for November: butterfat $1.6336; protein $3.6316; nonfat solids $1.7042; other solids $0.3955.
National Dairy Products Sales Report for the week ending November 30th, cheddar cheese blocks averaged $1.85 per pound down 2.4 cents, barrels were 2.5 cents lower at $1.81, butter increased 6.3 cents to average $1.60, nonfat dry milk was 0.7 cents higher at $1.91 and dry whey decreased 0.1 cent to 59.3 cents per pound.