In Basis Loaded, Joe Schmit takes a deep dive into this week’s NDPSR report.
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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

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Show Transcript

(Transcript auto-generated)

00;00;00;20 – 00;00;08;25

Future trading involves risk and is not suitable for all investors. Content provided in the segment is meant for educational purposes and is not a solicitation to buy or sell commodities.

00;00;08;27 – 00;00;32;11

Hello and welcome to the May 8th edition of Bases Loaded with Joe Schmidt. I am Joe Schmidt. This episode, as always, is produced by Paige Driscoll. It is a glorious spring day here in the Upper Midwest. We’re talking 80 degrees and full sun. What better way to celebrate then the latest from the report? Let’s start with butter. This butter number coming in to 9877.

00;00;32;18 – 00;01;15;10

That represents a plus one to the see me one week average of two 9750 plus one is a little bit under our expected basis. And here as the Npci approaches that $3 level, we’re seeing that basis contract a bit could have something to do with the $3 level. Could also have something to do with the 43 lows that we traded at the see me last week, 43 loads at essentially 301 minus the freight probably went a long way to pull that basis down with that 43 loads at the sea meet last week, we were able to achieve our normal volume here on the PSR, coming in a little bit over 3.6 and about 139,000 pounds

00;01;15;13 – 00;01;40;22

over our expected Indy PSR volume in the cheese complex. We’ll start with the blocks one 6561. That’s a plus four to the CME. One week average of one 6155. Now the CME to achieve that level was up six and a half week to week. Here on the PSR we’re able to muster a seven and a half cent gain.

00;01;40;22 – 00;02;08;21

So a really nice price on this week’s any PSR the manufacturer was able to call a higher than expected price. However, volume suffered at that level, falling short of even the 10 million pound mark. So call it 2 million under our expected volume in the block, however, the manufacturer was able to call a nice price. Maybe that volume is off a little bit because we only traded two loads at the semi last week.

00;02;08;21 – 00;02;35;17

So light volume amid a see me market that is rapidly moving higher. But here on the S&P are able to keep up and actually even gain a little bit more than what we saw at the CME in the barrels. One 7247 that represents a plus three and a half to the CME. Two week of one 6915. We traded nine loads at the CME last week.

00;02;35;20 – 00;03;00;28

So not a whole lot of volume there. It’s interesting. The CME was up ten here on the PSR also up ten. So the barrel keeping pace. If you’re using the two week average with the gains that we’re seeing at the CME three and a half is still at the low end of our expected 4 to 6 cent positive basis.

00;03;01;03 – 00;03;31;06

So the manufacturer had to discount a little bit. You would expect that, you know we would lag as the market’s rapidly rising higher at the CME. But at the three and a half over, the manufacturer was able to move north of 13 million pounds. So respectable volume at that level. And here you know off of our lows and moving towards a new neighborhood, the manufacturer is still able to move good weight in the barrel, certainly impressive as it keeps up with the gains that we’re seeing at the CME.

00;03;31;09 – 00;03;55;27

And then in the way 4117. That’s a plus three to the semi one week average of 38. We traded 11 loads at the CME last week. So not a whole lot of weight to talk about there. To achieve that 38 level. The CME was up $0.02 off of its low and here gaining well just a little bit under half a cent on the NP.

00;03;56;01 – 00;04;38;03

SR. So it looks like the way is going to maintain this 2 to 3 cent positive basis and maintain prices in the low 40s, even though the CME dip down to one week as low as $0.36 here, the investor holding a little bit of a premium, trading just north of $0.41. If you go back to the April 20th number of 4275, the manufacturer had to discount a little bit to move weight, but they were successful in doing so, almost 6.3 million pounds at that penny and a half discount under prior week’s PSR.

00;04;38;06 – 00;05;10;10

So they’re keeping the weight moving in the way, even though we’re in a new price neighborhood. And I would expect that we Nestle in here at this 40 $0.01 level in the weeks to come. And then lastly, nonfat one 1341. That’s an increase week to week on the PSR. We don’t have the big bulk sales that we had last week, you know, last week north of 33 million pounds this week, right at our average, just a little bit north of 20 million pounds and able to maintain a $0.01 premium over the CME one week average of one 1215.

00;05;10;10 – 00;05;36;08

We traded 12 loads on the CME last week, so not huge volume there, but definitely respectable one sentence below our expected to send positive basis. And again it looks like the powders are nestling in at this new neighborhood. So this is week one of five for the May pricing cycle. Currently getting May class three all the way up at 1852 with May class four at 2050.

00;05;36;09 – 00;05;50;18

We’ll see what they have in store for us in the weeks to come. Until then, on behalf of page and the entire Ever Energy Insights team, I’m Joe. Have a nice week bye.