After a big decline over the past couple of days, spot butter popped back up to $3.03 today, the highest level this week. And while Q3 futures briefly traded below the $3.00 mark yesterday morning, they closed today averaging $3.11 per pound (+$0.03). As we’ve seen following the past few Cold Storage reports, the market seems to have shaken off the bearish vibes, with buy-side interest continuing to support the market. Also, it was notably the second day in a row of steady-to-lower spot cheese prices, yet cheese futures largely closed higher on the day.
Some bullish sentiment returned to the CME butter market after its recent tumbles. Spot prices jumped 5.5 cents to $3.0300 per pound on low volume. Meanwhile, spot blocks drifted up and down, in search of a direction before settling where they began at $1.8100 per pound. The barrel market continued to step down, ending the day at $1.9400 per pound, two cents lower.
Butter futures also climbed higher, with contracts ticking up for July 2024 through March 2025. Third quarter futures advanced to $3.1067 per pound, up three cents on the day, but down more than eight cents versus last Thursday.
Dairy cow slaughter rates continue to decline as tight replacement heifer inventories encourage farmers to hold onto their herds. For the week ending May 18, 47,000 cows were processed, down 2.1% versus the week before and -14.4% year-over-year. The South saw the biggest drop-off, down 32.1% on the year.
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