CHICAGO — You should have gone long butter.
Spot prices for the dairy product — perhaps one of the more overlooked commodities trading on the Chicago Mercantile Exchange — rose 2.5 percent to a record $3.10 a pound Thursday. Butter futures are up 65 percent this year on the bourse.
Three things are driving the rally, according to Brendan Curran, a risk-management consultant at INTL FCStone Inc. in Chicago. First, milk production is shrinking in drought-stricken California, the biggest U.S. butter supplier, driving up costs for producers. Second, demand is strengthening as we come up to the holiday baking season.
To read the rest of the story, please go to: Bloomberg News
