Class III futures bounced back bigtime this week, led by another strong performance in the whey market. CME spot whey powder rallied 8.25ȼ, notching a 12% increase in just five sessions. Spot whey now stands at 79.25ȼ per pound, less than a dime from the historic high set in early 2022. While 80ȼ whey proved unsustainable last time around, the latest rally may have more staying power. Manufacturers continue to direct as much whey as possible into the highest-protein concentrates and isolates, limiting production of commodity whey powder. Through October, U.S. whey powder output was 10.2% lower than the year before, and production has remained light into December. Whey protein concentrate prices continue to climb, evidence of nearly insatiable domestic demand for protein. The bears argue that new cheese production capacity could boost whey supplies next year, and the futures reflect these concerns. They project that whey values will drop to a still lofty 70ȼ by mid-2025. But for now, the bulls are in charge.
December 13, 2024
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