CME Cash Market Summary
Daily CME spot dairy market price summary
Dairy Team - Chicago
- Dairy
Early Morning Update - February 27, 2025
By: Dairy Team - Chicago, Dairy Chicago
The dairy markets have had no shortage of news to digest in the last 24 hours. We’ll get to the Cold Storage report but first – we gotta talk about Tariffs.
This week began with a perceptible slump to markets broadly as the pile-into-equities-because-of-deregulation-and-tax-cuts-Trump-trade began to unwind. Now that DOGE is impacting employment and consumer sentiment and tariffs are being used as bargaining tool instead of a weapon, those expectations for growth and inflation were seen as “overdone” and markets were “risk off” earlier this week. And dairy was included.
Then yesterday the 25% tariffs with Canada and Mexico were reportedly delayed another month yesterday only to have that reversed this morning with a March 4 start date. The trade viewed this as a negative earlier this week (and perhaps before that too to some degree) and that narrative is getting resurrected this morning. Meanwhile, cheese inventories are still underwhelming to put it nicely.
Cheese stocks at the end of January were 16 million pounds heavier than expected but still down 5.7% from last year. While it was above forecast, stocks in January were down 82 million pounds YoY, which is the biggest decline we’ve seen during January in at least 2 decades and would argue for CME block close to $2.00/lb, even though they averaged $1.88 for the month. While the market has given little credence to these reports at times likely due to commercial realities (if demand is weaker than expected or than normal, tight stocks matter less), the casual nature with which market bears discount tight stocks is also dangerous. Class III and Cheese is going to get choppy here as volume and trading interest is spiking this week along with opposing news/views.
Spot butter fell another penny yesterday and this time did so on a sharp increase in volume. 26 butter loads traded yesterday as the trade moves closer to the new crop date of March 1. Right now loads that were produced on or after December 1, 2023 are eligible to trade during the spot call. Next Monday that production date migrates to December 1, 2024 and later. Still, we’ve got cream and we’ve got butter to move and the market started to absorb some of that yesterday. Directionally futures are still in their downtrend and but yesterday’s Cold Storage report could stem the tide a bit here.
Butter stocks were 14 million pounds lower than forecast and December was revised down by 8 mil. lbs. as well. That still leaves stocks at the end of January up 9.2% YoY, but it does suggest demand was better than thought for December and probably January as well. With butter stocks coming in well below forecast and estimated disappearance shifting higher, the stocks/use ratio for Q1 lines up well with a $2.40 price, right near out forecast. We’ve heard anecdotally that there is still plenty of cream available but this report could put a pause in the current trend lower.
Spot NFDM pushed 0.75 cent higher holding the line at psychological support of $1.20 with 6 trades and 22 unfilled bids left on the board against 2 offers. We still don’t have much in the way of fresh news. Demand reportedly remains lackluster, but like with any market, there often is a demand response to price. We think we’re starting to see that now. NFDM futures are quiet so far this morning following modest weakness yesterday. We look for a mixed trade early.
- Dairy
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CME Cash Market Summary
Daily CME spot dairy market price summary
Dairy Team - Chicago
- Dairy
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