Friday Midday Dairy Market Summary - Cheese and Butter Hold Steady

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	37 Lower
SOYBEAN MEAL:	$5.10 Lower
LIVE CATTLE:	$2.25 Higher
DOW JONES:	578 Points Higher
NASDAQ:	310 Points Higher
CRUDE OIL:	$2.66 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged at $1.4600 and $1.4625, respectively. Buyers did not show up Friday, with only an offer posted in each category. Dry whey price remained unchanged at 76.00 cents, with no loads traded. Class III futures are mixed, ranging from 5 cents lower to 9 cents higher. The butter price remained steady at $1.3700 with 12 loads traded. There were 15 unfilled bids and 30 uncovered offers. Grade A nonfat dry milk gained 3.00 cents to close at $1.9700 with four loads traded. Class IV is 8-27 cents lower. Futures are adjusting to move in line with underlying cash and ahead of the weekend. Butter futures are 1.35 cents lower to 0.50 cent higher. Dry whey futures are 0.47 cent lower to 0.47 cent higher. Cheese futures are 1.00 cent lower to 0.60 cent higher. Nonfat dry milk futures are 0.25-1.00 cent lower. The World Agricultural Supply and Demand Estimates (WASDE) report was released, with USDA increasing its estimate for milk production to 237.2 billion pounds for this year and to 238.6 billion pounds for next year.

Friday Morning Dairy Market Update - Price Support Remains Elusive

OPENING CALLS:

Class III Milk Futures:	3 to 6 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Lower
Soybean Futures:	13 to 15 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	4 to 5 Lower

MILK:

Class III milk futures continue to show weakness. In overnight trade, the October contract fell to $16.02 before regaining some of the loss. Support remains elusive. The outlook does not look positive as seasonal strength has not developed. Milk production is sufficient for bottling and manufacturing needs with no concern over supplies through the end of the year. The World Agricultural Supply and Demand report will be released this morning. 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. The report is not a market-mover but is used for projecting price potential.

CHEESE:

The fall of the barrel cheese price on Thursday did not have any impact on milk prices, as barrels are not used in the milk price calculation. However, it does indicate the weakness prevalent in the market and supports the weakness seen in blocks.

BUTTER:

The butter price is just 7 cents above the low of this year.

There is nothing to indicate the price will not decline to that level before it will be low enough to generate more aggressive buying interest. Offers on the daily spot market remain large, keeping the market bearish with limited upside potential.

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.