Wednesday Morning Dairy Market Update - Butter Rebounds into the Night

OPENING CALLS:

Class III Milk Futures:	1 to 10 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	0.30 to 0.50 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 4 Lower
Soybean Futures:	Mixed
Soybean Meal Futures:	$1 to $3 Higher
Wheat Futures:	4 to 6 Lower

MILK:

High production is still looming over the market, putting a limit on how high milk futures want to climb. Individual components that make up Class III and Class IV have given the futures market some life, but it is hard to rally when supply is plentiful. Non-fat dry milk has really shined this week, but it has really been building over the last several months. Dry whey has also had some impressive price action, and demand has continued to grow.

CHEESE:

Cheese is also battling with the massive supply to work through, but overall prices have shown some promise. The cash market is continuing to find buyers for blocks. Some holiday purchasing has begun to take place, although with the supply available, there is really no hurry to get needs purchased immediately.

BUTTER:

Butter has been the weak link in the dairy market. The amount of cream available has led to a huge influx of butter production, increasing month over month and year over year. Much like cheese, holiday baking would typically become a discussion factor for this time of year, but there is no concern that the supply will not be there when demand ramps up.

Tuesday Closing Dairy Market Update - Global Dairy Trade Increases 1.2%

GENERAL OVERVIEW:

The Global Dairy Trade Auction took place this morning, increasing the GDT Price Index by 1.2% with an average winning price of $3,928 or $1.7817 per pound. Futures found support today in nearly all dairy products outside of butter.

MILK:

Class III ended up trading higher by midday today after a supportive GDT auction as well as cheese blocks continuing to trend higher in the cash market. Skim Milk Powder had the highest price increase from mid-September GDT, climbing 4.3%, while Lactose fell the sharpest out of all the categories, ending up 6.9% lower. Whole Milk Powder had the greatest volume of trade, with the most loads selling to New Zealand.

AVERAGE CLASS III PRICES:

3 Month:	$15.61
6 Month:	$16.21
9 Month:	$16.54
12 Month:	$16.81

CHEESE:

Cheese prices fell on the GDT today, with Cheddar 3.7% lower and Mozzarella 3.9% lower. These are some of the lowest prices the market has seen over the last five years, but still at a premium to this summer's lows. The cash trade had blocks climbing another cent earlier today, allowing futures to climb 0.2 to 1 cent higher on the day. Traders are watching closely for anticipated holiday buying.

BUTTER:

Butter fell 0.3% on the GDT auction to $4,740 or $2.15 per pound. Cash trade also had butter drifting slightly lower, falling 0.5 cents on the day. Butter futures were a bit more dramatic in price action today, ending up as much as 5.375 cents lower on the January contract. Production is strong, and supply is great, so there is no need to get excited about buying butter today.

OUTSIDE MARKETS SUMMARY:

December corn closed up 10.75 cents per bushel at $5.0800, November soybeans closed up 22.25 cents at $13.0300 and December soybean meal closed up $7.70 per ton at $354.80. December Chicago wheat closed up 12.00 cents at $7.0425. December live cattle closed up $4.13 at $224.10. November crude oil is up .01 per barrel at $89.44. The Dow Jones Industrial Average is up 253 points at 51,521 and the NASDAQ is up 122 points at 27,599.

Tuesday Midday Dairy Market Summary - Class III Higher

OUTSIDE MARKETS SUMMARY:

CORN:	10 Higher
SOYBEANS:	17 Higher
SOYBEAN MEAL:	$7.10 Higher
LIVE CATTLE:	$2.575 Higher
DOW JONES:	237 Points Higher
NASDAQ:	141 Points Higher
CRUDE OIL:	$0.07 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 1 cent to close at $1.3350 with 8 loads traded. The barrel cheese price remained unchanged at $1.4525 with no loads traded. The dry whey price was also unchanged, closing at 83.50 with no loads traded. Class III has come off of overnight lows trading now 1 to 11 cents higher. The butter price fell 0.50 cents, closing at $1.3100 with no loads traded. There were 3 unfilled bids and 29 uncovered offers remaining. Grade A nonfat dry milk increased 2.75 cents to close at $2.2475 with 5 loads traded. Class IV futures are 4 cents lower to 8 cents higher. Butter futures are 2.9 to 5.375 cents lower. Dry whey futures have not yet traded today. Cheese futures are 0.10 -- 0.50 cents higher. Nonfat dry milk futures are 1.325 to 3.85 cents higher.