CME: American Cheese Stocks Lower Than Prior Year

US - According to USDA’s “Cold Storage” report released this afternoon, American cheese stocks increased modestly, +0.2% or 1.5 million pounds in January 2012 to 612.5 million pounds vs December 2011, writes Alan Levitt, in Wednesday's Dairy Report.
calendar icon 23 February 2012
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American cheese stocks are 4.0% or 25.5 million pounds less than last January’s level of 637.9 million pounds (see chart). The report indicates January’s strong milk production gain was either converted into nonfat dry milk and butter or if it was manufactured into American style cheese it was consumed domestically or exported.

On the surface, the “Cold Storage” report appears to be more bearish for the butter market than the cheese market. Butter stocks during January 2012 increased by 60.2% or 64.3 million pounds during the month to 171.2 million pounds. That is also 44.1% or 52.4 million pounds greater than January 2011. However, butter stocks in January 2011 totaled 118.8 million pounds, significantly less than January 2010 at 168.1 million pounds and January 2009 at 176.5 million pounds.

CME cash dairy product markets continue to come under modest selling pressure. The block and barrel cheese markets each closed 0.50¢ lower at $1.4800/lb. and $1.4750/lb. after three and two trades, respectively. Class III Futures settled lower through 2012. Spot butter prices closed unchanged at $1.4150/lb. with a single offer left on the board, which means there could be more downside in the cash butter market.

Further Reading

- You can view the full report by clicking here.

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