In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.

Block cheese prices have bounced back, counter-seasonally, over the past two weeks, jumping from $1.80 to $1.88 per pound.

Last week’s cold storage report showed cheese inventories in October dropping 4.3 percent compared to September. The report also pointed to higher-than-expected holiday sales and a possible uptick in exports.

All of the price strength is in block (natural cheddar), however, as barrel markets (processed American) are just $1.78 per pound. The 10-cent difference is roughly three times the traditional spread.

Block prices are expected to be seasonally lower in December and drop back to $1.80 per pound or lower by year’s end.

Cheese futures prices are trading at $1.69 on average for the first half of 2014 and $1.72 for the second half. A futures average of $1.71 for all of 2014 reflects expectations for strong global demand, but that’s still almost a nickel less than a projected average of $1.76 for 2013.

Contact John T. Barone at jbarone@mktvsn.com.