Take a deep dive into this week’s NDPSR report with Joe Schmit in Basis Loaded.
Questions or comments?
Contact Joe at joe@ever.ag or give us a call at (312) 492-4200.
Source: USDA https://www.ams.usda.gov/mnreports/dy… —
Music: The Return of Laín Coubert composed by Jaden Schmit
https://soundcloud.com/jaden-schmit/the-return-of-lain-coubert
(Transcript auto-generated)
0;00;00;20 – 00;00;08;29
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;01 – 00;00;32;18
JOE
Hello and welcome to the January 18th edition of Basis live with Joe Schmitt. I am Joe Schmitt, host of the show and I don’t know if I mention fantasy football champion. We are emerging from the deep freeze here in Chicago all the way up to a balmy 20 degrees Fahrenheit. What better way to celebrate than with the latest from the APEC report?
00;00;32;21 – 00;01;00;19
JOE
Let’s start with butter. This butter number came in a two 6447. That is a flat basis to the sea. Me one week at two 6488, that was a high week at the CME prior to moving a dime lower. So you would expect lower than normal basis. And that’s exactly what we received at that flat basis. The manufacturer, it looks like they sacrificed price a little bit to move weight.
00;01;00;24 – 00;01;33;14
JOE
Big volume here on the ellipse are north of £4.7 million. That includes the 15 loads that we traded to see me last week. As I said it, about an average of $2.55. So I move it CME extra volume on the part of the manufacturer also loads at the CME at a lower than the benchmark level. All that adds up to a flat basis, which is what we received.
00;01;33;17 – 00;02;15;26
JOE
However, the manufacturer was able to move good way. So all in all I’d have to call it a win for butter. Up next is cheese in the blocks one 5098 that represents a plus eight to the CME one week average of 140 to 63. Now, this is the last week for the CME in the low one forties. Manufacturers like we’re not ready for that price level held out for higher values which they received it over is well over are expected a 2 to 4 cent positive basis.
00;02;15;28 – 00;02;38;06
JOE
However volume suffered a little bit. You’ll notice that this is the third week in a row now at around the £11 million mark. Well below are expected, 12 and a half million. We traded 24 loads at the CME last week. Even that didn’t help. The volume here on the end of EPS are still coming. In short of 11.6.
00;02;38;06 – 00;03;06;15
JOE
So really nice price in the block. However volume suffering in the barrels one 4807 that is a plus five and a half to the DC in the two week average of one 4256. Basically parity in the CME average is on the blocks and barrels in that low 142 level you’re on the EPS are the blocks carrying a 3% premium as you would expect.
00;03;06;17 – 00;03;30;10
JOE
Five and a half is right in the middle of our expected 4 to 6 cent positive basis. We traded 42 loads at see me last week at essentially a 146 average which is of course $0.04 above the two week benchmark. So that could be a little bit of the reason why we have this elevated basis. However, we were expecting 4 to 6.
00;03;30;10 – 00;04;02;25
JOE
So just at the high end of the expected range basis, probably a little bit lower than you would have thought. And even at that basis level, the manufacturer is still only able to move £12.4 million, so about 1.1 million under our expected volume threshold. Middle of the road basis in the barrel on lower than expected volume. Certainly nothing to write home about there in way 4309.
00;04;02;28 – 00;04;26;14
JOE
That represents a plus four and a half to the see me one week average of 3838. But of course in way we’re talking about the December 30th and the PCR level we were back at 4109 on December 30th. Sales based on that benchmark, sold $0.02 over at 4309. So the manufacturer was able to call a two cent premium over prior weeks.
00;04;26;14 – 00;04;47;01
JOE
And the PCR, as the sales on this report occurred last week, last week, the prior we sent the PCR was 41.9 at December 30th. Number two over is a nice number and the manufacturer is still able to move north of £4.6 million. We only had two loads traded on the CME last week, so not a lot of help there.
00;04;47;05 – 00;05;24;11
JOE
£4.6 million at an elevated basis level. Certainly a win for the manufacturer and the way market still proving that it has legs despite the recent declines that we’ve seen at the CME. And then lastly, not for one 2071. This is a very nice price. That’s a plus for to the see me one week average of one 1650. We traded 11 loads of nonfat on the CME last week that 11 loads didn’t really translate over here to the end of PSR 15.8 well below our expected £20 million level.
00;05;24;11 – 00;05;55;05
JOE
So the manufacturer was able to call a four over positive basis but sacrificing volume at that level. So this is week two of four of the January pricing cycle, currently getting a January class three of 1517 January, Class four up at 1930. If you carry currency equivalence out through the remainder of the fab pricing cycle. This, of course, is the first week of fab pricing at the CME.
00;05;55;08 – 00;06;17;21
JOE
If you carry current prices out through the remainder of the four week fab pricing cycle getting in February, class 315, 28, February, class for 19 even, We’ll see what they have in store for us in the weeks to come at the CME. And so then on behalf of page and the entire ever Insights team, thanks for joining us.
00;06;17;24 – 00;06;19;26
JOE
Take care stay warm out there bye.