Basis Loaded – September 13, 2023

00;00;00;20 – 00;00;09;02
VOICEOVER
Future trading involves risk and is not suitable for all investors. Content provided in the statement is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;09;05 – 00;00;32;11
JOE
Hello and welcome to the September 13th edition of Bases Loaded with Joe Schmitt. I am Joe Schmitt. In this episode, as always, is produced by Paige Driscoll and the entire Ever Egg Insights team. What we do here is break down the latest from the report. Let’s kick it off this week with the one shining star component that is butter.

00;00;32;11 – 00;01;09;26
JOE
This butter number coming in at two 6675 represents a plus two and a half. So the CMA one week average of two 6430. Now this was a big shift in basis to see me was down six. Andy PSR barely even lost a penny. So basis in butter moved back above our typical expected to cent positive basis. And all of this while we treated 49 loads on the CMA last week, those 49 loads translated here to the EPS are.

00;01;09;26 – 00;01;51;11
JOE
This is the only component on this week’s report where volume came in higher than expected, surpassing the £5 million mark, more than a million and a half pounds above our expected 3.5 level. All in all, a big win. And as I said, the true star of the PSR report this week. Next up is cheese, starting with blocks. This block number coming in at 20108 represent it’s a plus six to the see me one week average of one 9470 now we were expecting higher than normal basis as a C me dropped seven and then is back up three.

00;01;51;18 – 00;02;17;17
JOE
So this one 9470 is kind of the low watermark you would expect. That sale staggered over a few weeks would come in a little bit higher to that plus six qualifies that is anywhere from 2 to 3 times our expected basis. Nothing at the CMA to pull basis down. We only traded three loads. So again, meager volume at the CMA plus six is really good basis.

00;02;17;19 – 00;02;59;07
JOE
However, that higher than normal basis came at a cost as the manufacturer was only able to move £10.8 million well short of our expected 12.5. So call it almost £2 million under in the block and this streak of lower sales out of the manufacturer extends to a full five weeks. Now on the IDPs are as manufacturers are struggling to hit our expected sales volume levels story remains the same in barrels one 8815.

00;02;59;07 – 00;03;21;24
JOE
That represents a plus five and a half to see me two week average of 180 to 75. Five and one half is right in the middle of our expected 4 to 6% positive basis. We were able to achieve that basis while trading two loads at the CMA. So again, meager volume at the CME, but that’s not the only place we’re seeing light volume.

00;03;21;26 – 00;03;48;29
JOE
This week’s only PCR volume coming in at £12.4 million, more than £1,000,000 under our expected. So when you combine the block coming up, 2 million short on volume, the barrel coming up a million short in commodity cheese. The manufacturer is losing about £3 million of sales per week for reasons that have yet to be revealed. We’ll see how things shake out in the future.

00;03;48;29 – 00;04;20;06
JOE
But right now, positive basis, that’s a nice price, but volume continues to limp along. Next step is way this way. Number coming in at 2844 represents a plus two to the see me one week average of 2630. We traded 11 loads on the CME last week so light volume on the CME in way 2844 is a nice price.

00;04;20;06 – 00;04;56;02
JOE
If you go back and look at the August 26 and the PSR way number of 2663, you’re essentially talking about a two cent premium over prior week’s average. So the manufacturer was able to call a nice overage over prior weeks in the PSR. However, as you’ve probably noticed, the theme on this week’s report is nice basis. The manufacturer able to call a nice sales price, but volume in way falling below our expected four and a half million pounds.

00;04;56;04 – 00;05;49;22
JOE
So wave I am falling off substantially as prices on both the CMA and and the PSR have bottomed and begun to trek a bit higher. We’ll see what happens here in the weeks to come. Futures calling for higher prices. In the coming months. We’ll see if prices on the end of PSR comply. And then lastly, nonfat one 1334 that represents a plus three and a half to the see me one week average of 110 even 21 loads traded on the CME didn’t really translate here to the end of PSR once again falling well short of our expected £20 million at only 13 million and some change low volume on the Indy PSR on higher than

00;05;49;22 – 00;06;31;03
JOE
normal basis seems to be the trend on this week’s end. The PSR report. So this is week two of five for the September pricing period, currently giving a SEP Class three expiration of 1825 September Class four expiration, 1875. I put both of those right on the option strike for the option traders and if you carry out currency me equivalents through the entire four week October pricing cycle, currently getting October Class 318 ten October Class four, 1870, we’ll see what they have in store for us in the weeks to come.

00;06;31;03 – 00;06;37;17
JOE
Until then, on behalf of Page and the entire ever ATG Insights team, thanks so much. Talk next week, bye.