Wednesday Midday Dairy Market Update - Butter and Block Cheese Showed Slight Gains

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$3.30 Higher
LIVE CATTLE:	$0.17 Higher
DOW JONES:	299 Points Higher
NASDAQ:	50 Points Higher
CRUDE OIL:	$0.02 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent to close at $1.4025 with eight loads traded. The barrel cheese price remained unchanged at $1.40 with no trades. The dry whey price increased a penny to close at 72.50 with no loads traded. Class III futures are 15 cents lower to 1 cent higher. The butter price increased 0.25 cent to close at $1.4025 with two loads traded. Grade A nonfat dry milk increased 0.50 cent to close at 41.18 with one load traded. Class IV futures have not yet been traded. Butter futures are 1.25 cents lower to 0.25 cent higher. Dry whey futures are 0.25-0.52 cent higher. Cheese futures are unchanged to 0.50 cent lower.

Wednesday Morning Dairy Market Update - Limited Volatility Expected

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	5 to 6 Higher

MILK:

Milk futures have been chopping around in a sideways pattern at the low-end of the trading range in nearby contracts. Later contracts have been able to hold some of the recent gains. The bearish November Milk Production report and the neutral to slightly bearish November Cold Storage report have not had much influence on the market. The current fundamentals do not suggest there will be much upside price potential for a while. Milk production is expected to continue to remain strong and cow numbers large. USDA will release the November Livestock Slaughter report Wednesday afternoon, showing the level of dairy cattle slaughter for the month. The markets will close at noon CST and will reopen Thursday night at the usual time.

CHEESE:

Further weakness of cheese prices may be possible as buyers remain unaggressive. Cheese supplies are plentiful, with demand likely slowing seasonally. The current level of the milk supply and strong cheese production is likely to limit the upside price potential for a while.

BUTTER:

The butter price is expected to have limited upside potential and the possibility of making a new low for the year over the next week. The minor increase on Tuesday may be temporary. However, the volume of loads traded might suggest buyers may be willing to step up at the current low price even though supplies are plentiful.

Tuesday Closing Dairy Market Update - November Butter and Cheese Inventory Declined

GENERAL OVERVIEW:

Class III futures held up well despite a further decline in spot cheese prices. Class IV futures showed limited trade. The November Cold Storage report was released on Tuesday, showing a decrease in all categories except Swiss cheese.

MILK:

Class III futures closed mixed but mostly higher. This was a bit surprising, as spot cheese prices declined on Tuesday. This does not indicate that traders believe a bottom has been found, but it was just some position-trading ahead of the holidays. Continued weakness of underlying cash does not bode well for milk prices moving through the end of the year. This also sets the stage for a negative beginning to 2026. Traders are a bit optimistic for the second half of 2026, with Class III futures above $17 and the October contract nearly at $18. Much of this strength may not be from an optimistic view of cheese and butter prices, but more of the potential for the dry whey price. Dry whey demand has kept the dry whey price in the 70-cent level, with some estimating dry whey prices may increase significantly later in 2026.

AVERAGE CLASS III PRICES:

3 Month:	$15.55
6 Month:	$15.91
9 Month:	$16.41
12 Month:	$16.74

CHEESE:

USDA released the November Cold Storage report on Tuesday. Cheese inventory declined in all categories except Swiss cheese. American cheese stocks declined 11.8 million pounds from October, totaling 787.3 million pounds. This is 2% above a year ago. Swiss cheese stocks increased by 461,000 pounds from October, totaling 22.0 million pounds. This was 6% below a year ago. Other cheese stocks declined 8.1 million pounds from the previous month, totaling 552.7 million pounds. This is 2% above a year ago. Total cheese stocks reached 1.362 billion pounds. This was down 19.5 million pounds from October, but 2% above November 2024.

BUTTER:

Butter futures bounced, but the gains lacked conviction. The higher spot price caused some short-covering. Butter inventory in November declined 18.2 million pounds to 210.5 million pounds. This was just 1% below the November 2024 inventory. The report is slightly bearish.

OUTSIDE MARKETS SUMMARY:

March corn closed up 0.50 cent per bushel at $4.4750, January soybeans closed down 1.75 cents at $10.5150 and March soybean meal closed up $2.30 per ton at $304.20. March Chicago wheat closed up 1.50 cents at $5.1700. February live cattle closed down $1.43 at $230.00. February crude oil is up $0.37 per barrel at $58.38. The Dow Jones Industrial Average is up 78 points at 48,442, with the NASDAQ up 133 points at 23,562.