Market Reports

SMP fell hard at the GDT Pulse event on Tuesday. It’s too soon to know whether the Pulse auction represents a good indication of global SMP values or if it can be dismissed due to limited participation in such a nascent event. But it certainly sparked fears about the health of global demand for milk powder.

USDA released its Milk Production report this week, indicating that national output contracted in September for the third month in a row. While they estimated only modest production losses for September, the agency made some important revisions to production in prior months, driven by both lower yields and fewer cows.

The butter market’s luck has changed dramatically. After repeatedly setting record highs since late September, the market descended in dramatic fashion this week. Despite the decline, butter prices remain historically strong as cream is tight and buyers are making their final orders ahead of the holiday season.

Like a mountaineer surveying Everest from K2, the butter market is exploring new heights. CME spot butter scaled a previously unconquered peak last week, and it didn’t stop there. This week it ascended another 20.25ȼ to a fresh all-time high at $3.5025 per pound. U.S. butter output topped year-ago production by wide margins in January through July.

The U.S. butter market took off like a rocket. It soared 30ȼ this week and closed at $3.30 per pound, just shy of the all-time high set yesterday. The meteoric strength caught the market by surprise.

CME spot butter soared an astounding 28.25ȼ this week and closed right at the $3 mark. Exports are out of the question, but domestic demand is firm, and butter churns are running light.