Spot markets finished weaker to end the week as strong volume was seen in barrels. Prices were down a ½ cent on 14 trades with 18 bids left unfilled below the market. Blocks saw more weakness with prices down 2 cents on 2 trades. That ultimately pushed prices weaker as nearby contracts continue their sideways trading while deferred futures make new lows. Seasonally, a part from 2022, April Class III has typically seen weaker prices into February but it currently sits at it’s lowest point during this date over the last 4 years. What drove it here has been mostly weak demand but also the anticipation of new capacity coming online this year.
Class III Managed Money positions has made new records increasing it’s net short positions to 7,781 contracts, surpassing the levels seen this summer. Net Other positions has steadily increase their short positions as well currently siting at 5,915 which is only about 300 contracts from its record.
Cheese production was slightly higher than forecast, up 0.7% from last year in November. Butter production was lower than forecast and down 3.7%. Combined NFDM+SMP production was also a little lower than expected. Sour cream and yogurt production were a little heavier than forecast and absorbed some of the solids I had plugged into butter and powder. NFDM stocks were lower than expected and down 16.9% YoY in November. The various whey powder stocks were mixed with some above forecast and others below forecast, but all of them are down from heavy year-ago levels.
Spot butter saw resistance last week as it was nearing $2.70. Stronger sell side stepped in Friday with prices down 7.5 cents to $2.5750 on 4 trades. Butter volume was bleak Friday as buy side interest stepped away given the spot move. 87 contracts traded with weakness felt in nearby contracts. Spot nonfat moved lower for the first time in 9 sessions with prices down 3/4ths of a cent on 9 trades. Futures volume was half of what was seen Thursday with 136 contracts trading as prices were mixed.
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