Wednesday Morning Dairy Market Update - Week Begins With Milk Futures Under Pressure

OPENING CALLS:

Class III Milk Futures:	10 to 12 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	2 to 3 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	7 to 8 Higher

MILK:

There is not much to say about the dairy market that has not already been said. Milk production is following a seasonal pattern, rebounding from the impact of hot weather. Cow numbers remain high and will likely remain that way as farms have expanded and continue to expand. The downturn in calf prices may be temporary and will continue to provide substantial income for the operation. However, the greater impact on profitability will be lower milk prices as plentiful supplies of butter and cheese weigh on the market. Class IV futures have been strong due to the strength of nonfat dry milk. However, that may be near a threshold, as nonfat dry milk may be near price resistance.

CHEESE:

The block cheese price has been in a steady downtrend since Aug. 13. Buyers have been able to purchase the cheese they need without having to chase the market higher. Supplies are sufficient, leaving buyers complacent. The seasonal buying is taking place for recutting and packaging for the holidays, but that has not been able to support the market.

BUTTER:

There is a lot of butter around. Manufacturers have consistently offered large volumes of butter on the daily spot market. Buyer interest has been good, but not good enough to absorb what is available.

Tuesday Closing Dairy Market Update - Traders Have Little to Get Excited About

GENERAL OVERVIEW:

Milk futures were under pressure today, with Class III futures showing slightly greater weakness than Class IV futures. The underlying cash is not providing much excitement for traders.

MILK:

Milk futures eroded further as the underlying cash prices provided little support. The October Class IV contract is more than $3.00 above the October Class III contract. The continued strength of nonfat dry milk is providing substantial support to the market. The fact that there has been little strength in cheese and butter prices does not bode well for the market. Any impact of milk production from hot weather is soon to be past, with milk output expected to follow a seasonal path as cow comfort improves. Sufficient milk is expected to be available for all areas of bottling and manufacturing. The current production trend may leave buyers less aggressive, as they do not need to buy aggressively to build inventory. Inventory may build naturally as the production of dairy products remains strong.

AVERAGE CLASS III PRICES:

3 Month:	$16.33
6 Month:	$16.62
9 Month:	$16.89
12 Month:	$17.09

CHEESE:

The barrel cheese price remains steady with little to no activity. Blocks continue to show weakness with limited buying interest. Buyers generally are more aggressive at this time of year, but they see little need to be, as supply remains available. Any seasonal purchases that will take price will be limited. The current demand is not exceeding supply.

BUTTER:

The butter price may retest the low from the end of July at $1.38. A substantial amount of butter offered for sale remains at the close of each spot trading day. As long as this continues, buyers will remain unaggressive.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.25 cents per bushel at $5.3350, November soybeans closed up 6.50 cents at $13.1625, and December soybean meal closed down $5.30 per ton at $349.80. December Chicago wheat closed up 13.00 cents at $7.4700. October live cattle closed up $4.08 at $217.03. October crude oil is up $2.60 per barrel at $94.08. The Dow Jones Industrial Average is down 628 points to 52,786, with the NASDAQ down 86 points to 26,421.

Tuesday Midday Dairy Market Summary - Milk Futures Post Further Losses

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$3.90 Lower
LIVE CATTLE:	$3.37 Higher
DOW JONES:	524 Points Lower
NASDAQ:	20 Points Lower
CRUDE OIL:	$0.62 Higher

MIDDAY MARKET UPDATE:

The block cheese prices slipped 0.25 cent to close at $1.4625 with no loads traded. The barrel cheese price remained steady at $1.5325 with no loads traded. The dry whey price remained steady at 75.25 cents with no loads traded. Class III futures are 2-23 cents lower, with November showing the greatest loss. The butter price declined 3.75 cents to close at $1.4025 with 13 loads traded. There were eight unfilled bids and 65 uncovered offers remaining at the close. It will be difficult to see much upside price potential in butter due to the volume of butter available to the market. Grade A nonfat dry milk increased 1.25 cents to close at $1.8925 with three loads traded. Traders are focusing more on the weakness of butter rather than the strength of nonfat dry milk. Class IV futures are 3-12 cents lower. Butter futures are 0.50 -- 3.00 cents lower. Dry whey futures are 0.50 -- 0.75 cent lower. Cheese futures are 0.10 -- 1.80 cents lower. Nonfat dry milk futures are 0.25 -- 1.05 cents higher.