Tuesday Morning Dairy Market Update - Overnight Trade Follows Similar Pattern

OPENING CALLS:

Class III Milk Futures:	10 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	Mixed

MILK:

It appears traders intend to create volatility in an attempt to scalp that market for a slight profit again Tuesday. The overnight pattern was similar with no change in fundamentals. Higher early trade on Monday succumbed to selling as the underlying cash market showed little change, and earlier positions were liquidated. A similar setup seems to have developed overnight. Spot trading will dictate the direction of the futures. Tuesday is the last day of trading for December futures and options, with the December Federal Order prices announced on Wednesday.

CHEESE:

The increase in the block cheese price Monday may not continue. Strong buying interest developed, but that was only able to increase the price by a penny. Manufacturers continue to move supplies to the market to avoid building inventory. Low prices should stimulate demand, but the time of year may limit the increase in demand.

BUTTER:

The butter price has been holding, but is not expected to have much upside price potential anytime soon. There is concern the price could make a new low prior to the end of the year. Sellers may want to move more inventory before the end of the year and buyers may hold back

Monday Closing Dairy Market Update - Milk Futures Close Lower With Substantial Volatility

GENERAL OVERVIEW:

Milk futures came under pressure on Monday despite relative stability in the spot market. Trading volume was large in January and February futures, with over 1,000 contracts traded in each. Dairy exports in September declined 2% on a milk solids equivalent basis.

MILK:

Class III milk showed significant volatility on Monday, with contracts showing large price movements through May. The January contract showed the greatest swing of 43 cents from high to low. Very limited trading activity took place in Class IV futures. Dairy exports in September showed a decline of 2% on a milk solids equivalent basis. However, butter and cheese exports continued to show impressive growth. Year-to-date exports of dairy products remained 1.7% above the same period in 2024. However, the strong gains in butter and cheese exports compared to a year ago have had little impact on domestic prices as seen on the daily spot market. It will take a contraction in milk production and/or an increase in demand to change this anytime soon.

AVERAGE CLASS III PRICES:

3 Month:	$15.49
6 Month:	$15.86
9 Month:	$16.37
12 Month:	$16.72

CHEESE:

September exports of cheese increased 34.5%, totaling 52,854 metric tons over last year. Year-to-date exports are 17.2% above the same period a year ago. Lactose exports totaled 37,455 metric tons, down 5.4% from September 2024. Year-to-date exports are up 0.3% compared to the same period a year ago. Whey exports totaled 40,329 metric tons, down 13.3% from a year ago, with year-to-date exports down 3.6% from the previous year. Whey protein concentrate +80 exports totaled 8,098 metric tons, an increase of 9.9% from September 2024. Year-to-date exports are 10.4% higher than a year ago.

BUTTER:

Butterfat exports continue to show phenomenal growth, with September exports up 100.9% above a year ago, totaling 8,817 metric tons. Nonfat dry milk/skim milk powder exports declined 18.5% from September 2024, totaling 50,491 metric tons. Year-to-date exports are down 13.6%. Whole milk powder exports fell 29.3%, totaling 2,885 metric tons. However, year-to-date exports are 40% above the same period in 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed down 7.75 cents per bushel at $4.4225, March soybeans closed down 9 cents at $10.6350 and March soybean meal closed down $4.10 per ton at $303.30. March Chicago wheat closed down 6 cents at $5.1300. February live cattle closed down $0.68 at $228.98. February crude oil is up $1.08 per barrel at $57.82. The Dow Jones Industrial Average is down 249 points at 48,462, with the NASDAQ down 119 points at 23,474.

Monday Midday Dairy Market Summary - Class III Futures Unable to Hold Gains

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$3.40 Lower
LIVE CATTLE:	$0.82 Lower
DOW JONES:	275 Points Lower
NASDAQ:	171 Points Lower
CRUDE OIL:	$1.22 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased a penny to $1.3450 with 10 loads traded. There were four unfilled bids and one uncovered offer remaining at the close. The barrel cheese price remained unchanged at $1.40 with no loads traded. The dry whey price remained unchanged at 73.00 cents with no loads traded. Class III futures are 21 cents lower to one cent. The only increase was in the December contract, with Tuesday being the last trading day for the contract. The butter price remained unchanged at $1.4025 with no loads traded. Grade A nonfat dry milk decreased a penny to close at $1.17 with no loads traded. Class IV futures have traded unchanged in March, the only contract traded. Butter futures are 0.20-1.75 cents lower. Dry whey futures are steady to 0.20 cent higher. Cheese futures are 0.30-2.50 cents lower.