CME: Butter Falls to 21-Month Low

US - Yesterday’s spot trade was dominated by offers to sell. Butter fell 4.5¢ to $1.5050 and Grade A NDM dropped 7¢ to $1.38, writes Alan Levitt.
calendar icon 31 January 2012
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Butter futures were lower virtually across the board while NDM futures were unchanged. Whey futures were down in the front months.

The butter price hasn’t been this low since April 13, 2010. “Churning activity across the country is strong as cream supplies are plentiful and clearing from one region to another to find processing capacity,” says USDA’s Dairy Market News.

“Butter producers are gearing up production schedules and often, churns are running at capacity levels. With churning as active as it is, production is greatly surpassing demand, thus clearances to inventory are heavy.”

Butter production in 2011 was up more than 16 per cent, and end-of-year stocks were 29 per cent higher than the prior year, USDA says.

CWT accepted bids to provide export assistance on sales of 2.8 million lbs. of cheese and 11.0 million lbs. of butter for delivery through June. This marks the return of CWT assistance on butter, which had been dormant since October 2010.

Thursday is the last day to trade JAN futures and options. January Class and Component prices come out Friday morning.

Further Reading

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