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)
00;00;00;20 – 00;00;08;18
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;08;24 – 00;00;33;24
JOE
Hello and welcome to the January 24th, 2024 edition of Bases Loaded with Joe Schmitt. I am Joe Schmitt. This episode, as always, produced by Paige Driscoll, with the help of the ever Agg Insights team, we are finally thawing out here in the upper Midwest. What better way to celebrate than with the latest from the Indy PSR report? Let’s start with butter.
00;00;33;24 – 00;01;03;28
JOE
This butter number coming in at two 6156 is a plus five and a half to the seemingly one week average of two 5595. So this CME moved nine lower and PSR only downs three. That gives us that five and a half cent positive basis and that’s with 33 lows traded on the c m e last week. So in butter higher than normal basis and look at this volume approaching £4.6 million, so almost £1,000,000 over.
00;01;03;28 – 00;01;33;10
JOE
So the weakness of the CME did not translate to the PSR manufacturing held out for higher prices and on those higher prices they were able to move above expected volume. So certainly a win for the manufacturer this week in butter and cheese. The blocks came in at one 5235. That represents a plus seven to the semi one week average of one 4563 plus seven, of course, well above our expected to 2% positive basis.
00;01;33;10 – 00;02;11;20
JOE
We’re able to achieve that higher basis with 21 lows trading at the CMA. Those 21 lines, however, don’t really show up here on the PSR. Any PSR volume, a little bit of a disappointment falling just short of the £11.4 million mark and about £1,000,000 under the expected 12 and a half million. So the manufacturer was able to call a really nice price plus seven and the ability of the blocks to hang out north of this one, 50 level yet again, certainly impressive, but that higher price came as a cost as end users turn their nose up a little bit and volume is lackluster at best in barrels.
00;02;11;22 – 00;02;41;05
JOE
One 4914 that’s a plus five to the CME two week average of 144. Even so plus five right in the middle of our expected 4 to 6 cent positive basis story seems to be similar in the barrels as it is in blocks. Even with 16 lows traded on the CME last week, volume here still far short of 12 million, so blocks are about a million under the expected volume barrels, about a million and a half under.
00;02;41;07 – 00;03;10;12
JOE
So the manufacturer is holding out for positive basis, but sales are suffering both block and barrel sales underwhelming. Hence what’s interesting on the semi weekly average, we had a blocks of average of 145, 63 and a barrel average of 144. So blocks came in a penny and a half over on the semi weekly averages. But because the block basis was $0.02 higher than the barrel basis here on the anti PSR, we’re right at a three cent blackmail spread.
00;03;10;15 – 00;03;37;21
JOE
So interesting that even with the tightened spread that we’re seeing and to see me the anti PSR actual sales revert back to that three cent normal block barrel spread relationship. The big star on this week’s report is way 4388. That is a plus three and a half to the semi weekly average of one 4013. We treated 11 loads on the semi last week here on the PSR.
00;03;37;24 – 00;04;06;27
JOE
That volume showed up and then some coming in at £6.3 million, well above our expected four and a half million. So the manufacturer was able to move a lot of weight. And of course in way we’re always looking at the January 6th in our number of 40 to 64 manufacturers. So a lot of weight and a 1.2 cent premium to prior we send a PSR, so yet another new high for the move in dry way.
00;04;07;04 – 00;04;34;17
JOE
4388 similar to where the CME settled just today. It’ll be interesting if sales continue at this elevated rate at this elevated price. And then lastly, nonfat one 2118 it’s a plus three and a half to the CME one week average of one 1763. Three and a half is higher than expected basis, well over our two cent expected basis.
00;04;34;21 – 00;05;04;05
JOE
We treated 15 loads of nonfat add to see me last week and again similar to the cheese complex, that higher basis came out of cost. The ability to move weight volume in nonfat this week £15.6 million well below our expected 20 million and a string of three weeks of disappointing volume in non fat. So this is week three of four for the January pricing cycle.
00;05;04;05 – 00;05;29;15
JOE
Currently getting a January class three of 1520 with January class four all the way up at 1937. If you carry currency equivalence out through the four week February pricing cycle, getting February class three pretty close 1540 with February class four at 1920. So volatility coming out of the market just a bit. We’ll see what they have in store for us in the weeks to come see me.
00;05;29;15 – 00;05;34;14
JOE
Until then, I’m a half a page in the entire member insights team. I’m Joe by see you next week.