MD_DA640                                                         
DA                                                               
MD DA640 Nonfat Dry Milk - West                                  

MADISON, WI.  April 20, 2017 (REPORT 16)                         

NONFAT DRY MILK - WEST                                           

F.O.B. spot prices for western low/medium heat nonfat dry milk (NDM) 
shifted slightly up, in line with upward trends in some variable 
contract indices. NDM future values for Q2 moved slightly higher, 
too. The NDM market undertone is unsettled for most industry 
contacts. Several market participants are puzzled about the upward 
NDM pricing movements as supply is still large, well above buyers' 
demand. On the other hand, some NDM processors think the market is 
mostly in balance and prices are settling. Low/medium heat NDM usage 
for cheese fortification is active. However, interest from the bakery 
sector is sluggish. Meanwhile, the demand from Mexico is improving, 
but slowly. Some NDM/SMP export transactions from the western U.S to 
Mexico are reflected in the low end of the pricing range. In the 
U.S., western production of low/medium nonfat dry milk is very 
active, following seasonal milk outputs that are at or near to the 
seasonal peak. Inventories remain steady to building. 

Prices for high heat NDM are slightly higher on a quiet market. 
Production is irregular, mostly driven by current contractual 
requirements. Inventories are in balance with contract needs, but are 
somewhat tight in the f.o.b. spot market. 

At the GDT Event 186 on April 18, skim milk powder (SMP) prices 
across all contract periods averaged $.9272 per pound, up 7.1% from 
the last event.

Wednesday's CME Group cash trading for Grade A nonfat dry milk closed 
at $0.8475, up $0.0225 from last Wednesday. 

F.O.B. WEST:  Includes EXTRA GRADE and GRADE A                   
LOW/MEDIUM HEAT:    .7900 -  .8800   MOSTLY:   .8100 - .8600      
HIGH HEAT:          .9150 - 1.0325                               

1100CT AJ Ter n Angel.Teran@ams.usda.gov 608.422.8593
USDA/AMS/Dairy Market News, Madison, Wisconsin Dairy Market News website: 
http://www.ams.usda.gov/market-news/dairy
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-
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