CME Block and Barrel Price Rally Continues

US - CME spot Cheddar cheese markets continue to shrug off this week’s bearish “Milk Production” report and lower Global Dairy Trade Auction (GDT) results, writes Alan Levitt, on Wednesday 21 March.
calendar icon 22 March 2012
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CME Cheddar block and barrel prices were bid higher and closed 3.25¢ and 1.25¢ higher to $1.6350/lb. and $1.6250/lb., respectively. CME spot butter settled unchanged at $1.5225/lb. with no bids, offers or sales.

Class III milk futures through 2012 closed higher in response to stronger cash cheese prices. According to USDA’s recently released “Milk Production” report, the US dairy herd totaled 9.25 million head in February 2012, and is at its highest level since May 2009 (see chart).

California posted the largest year-over-year increase in cow numbers with a gain of 28,000 head followed by: Washington +12,000; Texas and New Mexico both +11,000; and Colorado and Michigan both +10,000. Minnesota reported the largest decrease of 5,000 head vs. the prior year, followed by Iowa with a 3,000-head decline and Missouri, Pennsylania, and Vermont each stating a 2,000-head drop.

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