Market Reports

After rocketing higher last week, CME spot Cheddar blocks continued to soar. But, the cheese markets are likely to remain volatile.

Though the bulls made headway, their progress was laborious. Each week they argued that tighter milk supplies and falling cheese inventories should lift prices. Now, the bulls are clearly in charge.

Football season has arrived, schools are back in session, and cheese demand is excellent. Output is not keeping pace. While Cheddar blocks score fresh multi-year highs, spot butter reached a milestone of a very different sort.

This weeks rise in cheese prices in an already lofty market are truly impressive. Last week’s Cold Storage report showed an astounding drawdown in cheese inventories, and the spot markets suggest that fresh supplies are tight.

Despite the rough week in the dairy pits, dairy product prices and Class III values in particular will soon find their footing.

The spot markets have been buoyed by robust near-term fundamentals. However, dairy futures were far from exuberant this week and some new clouds have moved onto the horizon.