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Milk Money 2/6/12
Monday, February 06, 2012

by Duo Yang & Zachary Fietsch of The PRICE Futures Group

Dairy Product Spot Call Reporter

Heavy demand for barrel cheese drove up its price today. A total of 15 loads were traded at as high as $1.51, but the majority of trades occurred at $1.495 and $1.505. Block is still oddly pricing below the barrels and only traded 2 loads to drive the price down another half-penny. Dry grade A and butter were offered down without buyer participation.

	Last	Final Bid	Final Offer	Trades	Unfilled @ Best Bid	Unfilled @ Best Offer	Close	Change
Block Cheese	1.4850	1.4800	1.4800	2	0	0	1.4800	-0.0050
Barrel Cheese	1.4950	1.5050	1.5050	15	0	0	1.5050	0.0100
Dry Grade A	1.3575	None	1.3325	0	0	1	1.3325	-0.0250
Dry Grade X	1.2975	None	None	0	0	0	1.2975	0.0000
Butter	1.4925	None	1.4625	0	0	1	1.4625	-0.0300

Dairy Futures

After a long haul south dry whey experienced a relief rally today. Although the dairy markets were down heavily overnight, class III and whey recovered nicely over the course of the day. Although it closed down 1¢/cwt, March class III made a rather epic recovery from -30¢/cwt on cheese buying that was described by floor commentators as “loading up the boat”.

Class III Quarter and Half Year Pack Averages
Q1		Q2		Q3		Q4
Price	Change	Price	Change	Price	Change	Price	Change
16.02	0.027	16.69	0.010	16.97	-0.033	16.73	-0.070
		H1		H2
		Price	Change	Price	Change
		16.36	0.018	16.85	-0.052

Cheese Quarter and Half Year Pack Averages
Q1		Q2		H1
Price	Change	Price	Change	Price	Change
1.5700	-0.0050	1.6983	-0.0053	1.6342	-0.0052

Dry Whey Quarter and Half Year Pack Averages
Q1		Q2		H1
Price	Change	Price	Change	Price	Change
58.00	1.758	48.50	3.167	53.25	2.463

Milk Margin

Weak performance of the grains today with SBM down $1.10/ton to $327.5/ton and corn up .25¢/bu to $6.4425/bu still left the yellow grain down .25¢/bu form Friday’s close.

Dominant Month Milk Margin
Date	Class III ($/cwt)	Corn ($/bu)	SBM ($/ton)	Alfalfa ($/ton)	DMMM ($/cwt)
1/31/2012	16.56	6.3900	319.3	324.4	5.68
2/1/2012	16.25	6.4200	322.3	324.4	5.34
2/2/2012	15.82	6.4300	323.4	324.4	4.90
2/3/2012	15.89	6.4450	328.6	324.4	4.96
2/6/2012	15.88	6.4425	327.5	324.4	4.95

Primarily due to the strength of the whey rally, the gross margin cheese spread closed up .4¢/lb.

Questions? Ask the Dairy Division today at 312-264-4373

Recent articles from this author

Milk Money 3/28/12 - Wednesday, March 28, 2012
Milk Money 3/26/12 - Monday, March 26, 2012
Milk Money 3/23/12 - Friday, March 23, 2012
Milk Money 3/22/12 - Thursday, March 22, 2012
Milk Money 3/21/12 - Wednesday, March 21, 2012

About the author

Duo Yang is a futures market analyst specializing in dairy. He offers brokerage and risk management services to milk producers and processors as well as speculators.

Duo Yang, educated as a ceramic engineer, entered the futures industry as an analyst researching the complex relationships between physical dairy markets, dairy futures, and government regulations.

In early 2012, Duo joined The PRICE Futures Group as a member of the dairy and agricultural hedging division and aims to provide unparalleled hedging services to milk producers and processors around the world.

Duo has passed his Fundamentals of Engineering exam, holds a Series 3 license, and speaks fluent Mandarin Chinese.

Contact Duo Yang: (800) 769-7021 or at dyang@pricegroup.com

Zachary Fietsch is a commodities market analyst specializing in dairy products, feed grains, and volatility products.

Mr. Fietsch offers services to domestic and international clients in both commercial and retail capacities. Additionally, Mr. Fietsch is an occasional contributor to OptionPit.com and authors policy papers for the U.S. dairy industry.

Zach obtained his M.S. in Financial Risk Management from Loyola University in Chicago and is a Level 2 candidate for the CFA designation. He is also Series 3 registered.

Contact Zachary Fietsch: (800) 769-7021 or at zfietsch@pricegroup.com

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