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;27
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;29 – 00;00;35;07
JOE
I welcome to the February 7th edition of Bases Loaded with Joe Schmitt. I am Joe Schmitt. This episode, as always, is produced by Paige Driscoll, with the help of ever Insights. What we do here is break down the latest on our report. We’ll start this week with butter. This butter number came in at two 6591. That is a plus three and a half to the seeming one week average of 262.
00;00;35;07 – 00;00;58;09
JOE
33 and a half is above average basis and at that elevated level, the manufacturer was able to move an extra half million pounds. Volume here on the piece are coming in north of 4 million, half a million above our expected 3.5 million. Three and a half is higher than expected basis and this is prior to the CME moving higher.
00;00;58;09 – 00;01;23;29
JOE
So last week seeming average was 277. We traded eight loads after seeing me at that elevated level and it looks like the elevated sales at the CME went a long way to pull that weighted average basis up, coming in at three and a half over. So all in all for butter, I’d have to call this a win for the manufacturer on both price and volume.
00;01;24;02 – 00;01;54;11
JOE
Up next is cheese. We’ll start with the blocks 154 or 36. That is a plus six to this see me one week average of one 4825 now that one 4825 was a little bit of a downtick at the CMA before moving significantly higher basis expanded on that down check on the CME as the only PSR hour went up just a little smidge on a lower relative CME benchmark.
00;01;54;13 – 00;02;32;16
JOE
So imitation sure was able to call good basis. And once again as the Indy PSR kind of consolidates in this low fifties area volume has been struggling this week no exception. Only £10.2 million reported on the PSR. So a disappointing volume relative to that nice sales price when compared to the C in the benchmark. If you go back four, five weeks as the black market has been consolidating in this low fifties level, the manufacturer has had a hard time moving weight.
00;02;32;19 – 00;03;01;25
JOE
At this low fifties level, buyers seem unimpressed with prices at that level. The CME, on the other hand, had different ideas and rallied almost $0.20 off of that low fifties level. So we were hurting in the in the low fifties, they decided to take the benchmark up close to 170 at the CME. It’ll be interesting to see how buyer behavior turns out in the future at that elevated level.
00;03;01;28 – 00;03;38;04
JOE
Next up is barrels one 5080. That’s a plus five to the CMA two week average of one 4601. Again, we treated 24 loads at the CMA last week at 154. So you have a fair amount of weight going in at an elevated level and that’ll pull that basis higher. However, even with that weight treated at the CMA volume, again struggling, failing to meet the 13 and a half million pound threshold for five, we saw the barrel struggling a little bit, consolidating a little bit lower than the block.
00;03;38;08 – 00;04;04;29
JOE
It call this 148 to 151 level moving minimal weight at that level and this, of course, is the precursor to higher prices that the CMA doesn’t make a whole lot of sense, but that’s the cheese market for here from time to time. Story and cheese here on the handpiece are relatively decent basis on significantly lower than expected volume.
00;04;05;01 – 00;04;38;06
JOE
Up next this way 4393. That’s another uptick up from last week’s only PCR price of 4362 and even premium to the prior. We extended PCR of 4384. So we’re talking about premiums everywhere. When you compare that 4393 this week to the CMA one week average of 4131, you’re talking about a two and a half cent basis premium. We treated three loads on see me last week, so not a lot of weight there to shake things up.
00;04;38;08 – 00;05;07;20
JOE
The fact that the manufacturer was able to call a premium north of 4384 that January 20th level is impressive. And the fact that they were able to sell north of £4.5 million coming in at 4.757 impress nonetheless. So the Andy piece, our Way approaches the 44 threshold. But of course prices at the CMA traded significantly higher than that before retreating rather abruptly.
00;05;07;22 – 00;05;50;16
JOE
It’s going to be really interesting to watch the any PSR way in the future and how buyers behave as they have to take on weekly increases in the PSR way price. And then lastly for that one, 2115, that’s a plus two and a half to the semi one week average of one 1869. We traded nine loads at see me last week and essentially a 123 level and similar to cheese that’s pretty nice basis two and a half over but manufacturer unable to move a lot of weight selling just north of £50 million well below our expected £20 million threshold.
00;05;50;18 – 00;06;24;12
JOE
So the manufacturer having no trouble selling way and butter based on the figures that we’re seeing on this report, however, cheese and nonfat appears to be having a tougher slog, a tougher go of it as prices trend higher. So this is with one of the February or week pricing cycle currently getting a February class three of 1611 with February Class four all the way up at 1985.
00;06;24;12 – 00;06;49;02
JOE
If you carry currency equivalence out through the five week March pricing cycle, currently getting March Class three, 1670 and that masterclass for right at that 1980 level. So we’ll see what they have in store for us in the weeks to come. Until then, on behalf of page and the entire Everyday Insights team, thanks for watching. We’ll see you next week bye.