Spot butter held at $1.87 on twosided trade, but butter futures slipped back.

Pressure on the milk powder market is building. Offers to sell two loads of Grade A NDM in the spot pit went uncovered, taking the price down 6¢ to $1.43, the lowest since mid January.

The California weighted average price (CWAP) dropped 3.3¢ this week to $1.4771, down for the sixth straight week. DEC NDM futures fell to $1.40 today and 2012 contracts are $1.3400 to $1.3750.

Fonterra is getting some of its plants back on line with back-up gas supplies after a pipeline leak shuttered most of its North Island dryers yesterday.

Estimates vary, but as much as onethird of New Zealand’s milk production was reportedly withheld from the market on Tuesday.

Cheese sales were sluggish this summer. American cheese use in the June-August period was down 3.1 per cent (see chart), while disappearance of other cheese varieties was up just 1.5 per cent, according to USDA data.

That left total cheese disappearance down 0.4 per cent in the three-month stretch, the first decline in total cheese use in two-and-a-half years.

Cheese export growth slowed to +4.2 per cent and domestic use was off 0.6 per cent in the three-month period.

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