MD_DA440 DA MD DA440 BUTTER - WEST MADISON, WI. February 4, 2015 (REPORT 5) WEST BUTTER The trade is trying to assess the impact of last week's strong 20 cents gain in pricing at the CME Group and continuing strong pricing through midweek this week. The increases have created some additional demand as some buyers are looking to protect their short positions. Other buyers are cautious and don't want to create additional tightness by overbuying at a time when their needs are generally light. Butter production is trending higher with increasing milk intakes and better cream availability. Producers are putting up print butter for Easter/Passover commitments and bulking excess. Export interest is retreating further as the price gap with other markets increases. The cream market has tightened and gotten a little pricier as the basing points move higher. Bulk butter pricing is 4 cents under to 4.5 cents over based on the CME Group with various time frames and averages used. There have been some opportunity buys as some averages are lower than current daily closes. Holdings are generally light to moderate. There are some major concerns about the longevity of current prices and the values of current inventories. The DMN National Retail Report-Dairy ads for the week of January 30-February 5, shows the U.S. weighted average advertised retail price for a one pound pack of butter at $3.32, down $.20 from last week but $.47 higher than a year ago. Butter ad prices averaged $3.49 in the Southwest and $3.99 in the Northwest. According to NASS, December butter production was 3.3% higher than a year ago in the U.S., while 8.5% lower in the West. Butter prices at the CME Group on Wednesday closed at $1.8500, up $.2125 from a week ago. 1530CT butch.speth@ams.usda.gov 608.278.4152 USDA/AMS/Dairy Market News, Madison, Wisconsin Dairy Market News website: www.ams.usda.gov/dairymarketnews Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-home