Thursday Closing Dairy Market Update - Class III Milk Futures Make New Contract Lows

GENERAL OVERVIEW:

The brief strength in Class III futures was short-lived, with Wednesday's gains being eliminated today. Milk remains sufficient for both bottling and manufacturing. The World Agricultural Supply and Demand (WASDE) report will be released on Friday.

MILK:

Milk production is improving in most areas as cooler weather is improving cow comfort. The milk supply has been sufficient for bottling and manufacturing through the summer despite hot weather and has remained sufficient to supply demand from schools reopening for the year. It is interesting to see that spot milk prices for the week were $2.00 below class to flat class at this time of year. One reason for this is the holiday weekend and the greater availability of milk, as some plants had reduced production schedules. USDA will release the World Agricultural Supply and Demand (WASDE) report on Friday. The report will show expectations for grain production, ending stocks and estimated prices. The report will also contain the estimates for milk production, milk prices and dairy product prices for this year and next year.

AVERAGE CLASS III PRICES:

3 Month:	$16.22
6 Month:	$16.54
9 Month:	$16.82
12 Month:	$17.03

CHEESE:

Cheese demand varies depending on the variety. Cheeses used for pizza are seeing increased demand as the football season gets underway. Overall demand has been steady. Cheese production is slowly improving as milk supplies increase. The sufficient supply keeps prices from trending higher.

BUTTER:

The price moved below the previous low and is now back to the lowest level it has been since January 16. The low for the year has been $1.30 and may be a level that could be reached before support may develop. The strength in nonfat dry milk is supporting the Class IV price. The nonfat dry milk price has reached the highest level since June 9.

OUTSIDE MARKETS SUMMARY:

December corn closed up 6.00 cents per bushel at $5.3375, November soybeans closed up 22.75 cents at $13.3225 and December soybean meal closed up $5.50 per ton at $356.90. December Chicago wheat closed up 12.50 cents at $7.4125. October live cattle closed up $1.98 at $217.83. October crude oil is up $7.80 per barrel at $103.85. The Dow Jones Industrial Average is down 317 points at 52,064, with the NASDAQ down 172 points at 26,082.

Fluid Milk and Cream - Western U.S. Report 37

Western region milk production is steady for Week 37. California is experiencing high heat this week, resulting in a small, temporary decline in volumes. According to contacts, milk remains available despite seasonal decreases. 

The Northwest continues to trend cooler, supporting improved cow comfort and consistent milk output. 

The Southwest reports stable milk volumes with no holiday-related issues. 

Class I demand remains steady as the pipeline transitions from school bottling back to standard operations. Class II and Class III demand show early holiday baking preparation patterns, while Class IV demand has eased, with prices trending lower. 

Cream loads are mostly available across the region, and some manufacturers report plants remained open through the holiday. Condensed skim milk (CSM) availability is tight, and specialty CSM is being sought for specific stakeholder needs. Milk-fat components have recovered following prior weeks of heat stress. Contacts report that plant capacity currently exceeds the volume of milk being received.

Thursday Midday Dairy Market Summary - Barrels Fall Hard

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	18 Higher
SOYBEAN MEAL:	$4.80 Higher
LIVE CATTLE:	$0.77 Higher
DOW JONES:	351 Points Lower
NASDAQ:	132 Points Lower
CRUDE OIL:	$5.92 Higher

MIDDAY MARKET UPDATE:

The block cheese price decreased a penny to close at $1.4600 with four loads traded. The barrel cheese price fell 7.00 cents to close at $1.4625 with 10 loads traded. This is nearly the number of loads that have been traded so far this entire year. There were four unfilled bids and one uncovered offer remaining at the close of spot trading. The dry whey price increased 0.25 cent to close at 76.00 cents with no loads traded. Class III futures are 31 cents lower to 1 cent higher. The butter price decreased a penny to close at $1.3700 with 34 loads traded. There were 19 unfilled bids and 54 uncovered offers remaining at the close of spot trading. This is the lowest price since January 16. Grade A nonfat dry milk increased 2.50 cents to close at $1.9400 with two loads traded. There were five unfilled bids and eight uncovered offers remaining. Class IV futures are 3 cents lower to 3 cents higher. Butter futures are 0.80 to 3.50 cents lower. Dry whey futures have not yet traded. Cheese futures are 1.90 cents lower to 0.30 cent higher. Nonfat dry milk futures are 0.37 to 2.95 cents higher.