Cheese Prices Surge Ahead of Christmas, Hitting Monthly Highs
Source: DairyNews.today
Cheese prices extended their upward trajectory in today’s spot market, with key benchmarks reaching their highest levels in over a month.
However, Class III milk futures showed signs of caution, cooling off after recent gains as traders await the USDA Milk Production report, set to release on Thursday. The report is expected to offer critical insights into supply trends and influence market sentiment.
Market Highlights
Cheese Market Rally:
Spot block cheese prices climbed to $1.8600 per pound, up $0.0375, while barrels surged $0.0550 to $1.7850 per pound. These gains mark the highest levels since October, fueled by robust demand ahead of the holiday season. Seven block and four barrel lots traded hands, signaling continued market activity.
Butter Strengthens:
Butter prices edged up by two cents to settle at $2.5200 per pound, with one lot exchanged. This builds on a streak of gains as holiday baking drives seasonal demand.
NDM Ticks Up Despite Global Weakness:
Nonfat dry milk (NDM) on the CME inched up by $0.0025 to close at $1.3800 per pound, even as the GlobalDairyTrade (GDT) auction recorded broad-based declines.
Global Dairy Weakness:
The GDT auction saw prices retreat, weighed down by a 28% drop in Chinese participation. Skim milk powder (SMP) fell 3.2% to $1.25 per pound, whole milk powder (WMP) slipped 2.4% to $1.76 per pound, and butter declined 0.7% to $3.01 per pound (adjusted to 82% butterfat). Cheddar and mozzarella prices also eased, dipping 0.1% and 2.1%, respectively.
Economic Indicators Provide Mixed Signals
Retail Spending Resilient:
U.S. consumers maintained steady spending in November, driven by a 2.8% monthly increase in auto sales, buoyed by lower interest rates and year-end promotions. Total retail sales rose to $724.6 billion, up 0.7% from October and 3.8% year-over-year.
Grocery and Restaurant Sales Struggle:
Grocery sales dipped 0.2% month-over-month but grew 1.7% compared to November 2023. Restaurant spending followed a similar pattern, down 0.4% from October but up 1.9% year-over-year.
Outlook
While cheese prices continue to rally, market participants remain cautious, with the upcoming USDA report likely to shape short-term dynamics. The holiday demand surge, coupled with steady consumer spending, could provide support for dairy prices in the near term. However, weakness in global dairy markets and tepid grocery sales may temper gains.
Market Highlights
Cheese Market Rally:
Spot block cheese prices climbed to $1.8600 per pound, up $0.0375, while barrels surged $0.0550 to $1.7850 per pound. These gains mark the highest levels since October, fueled by robust demand ahead of the holiday season. Seven block and four barrel lots traded hands, signaling continued market activity.
Butter Strengthens:
Butter prices edged up by two cents to settle at $2.5200 per pound, with one lot exchanged. This builds on a streak of gains as holiday baking drives seasonal demand.
NDM Ticks Up Despite Global Weakness:
Nonfat dry milk (NDM) on the CME inched up by $0.0025 to close at $1.3800 per pound, even as the GlobalDairyTrade (GDT) auction recorded broad-based declines.
Global Dairy Weakness:
The GDT auction saw prices retreat, weighed down by a 28% drop in Chinese participation. Skim milk powder (SMP) fell 3.2% to $1.25 per pound, whole milk powder (WMP) slipped 2.4% to $1.76 per pound, and butter declined 0.7% to $3.01 per pound (adjusted to 82% butterfat). Cheddar and mozzarella prices also eased, dipping 0.1% and 2.1%, respectively.
Economic Indicators Provide Mixed Signals
Retail Spending Resilient:
U.S. consumers maintained steady spending in November, driven by a 2.8% monthly increase in auto sales, buoyed by lower interest rates and year-end promotions. Total retail sales rose to $724.6 billion, up 0.7% from October and 3.8% year-over-year.
Grocery and Restaurant Sales Struggle:
Grocery sales dipped 0.2% month-over-month but grew 1.7% compared to November 2023. Restaurant spending followed a similar pattern, down 0.4% from October but up 1.9% year-over-year.
Outlook
While cheese prices continue to rally, market participants remain cautious, with the upcoming USDA report likely to shape short-term dynamics. The holiday demand surge, coupled with steady consumer spending, could provide support for dairy prices in the near term. However, weakness in global dairy markets and tepid grocery sales may temper gains.
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