Monday Closing Dairy Market Update - Monday Dairy Rally

GENERAL OVERVIEW:

It has been a strong start to the week as nearly every category of dairy products is trading higher going into the evening. The spot market has brought in additional demand as the calendar inches closer to the holidays.

MILK:

Class III milk futures are anywhere from 6 cents higher on the October contract to 45 cents higher on the more heavily traded November contract. Class IV futures are also rallying into the close, trading anywhere from 45 to 62 cents higher. With last Friday's outlook report released by USDA, production forecasts were down from last month's outlook report by 0.3 billion pounds of milk. While this seems like a big drop, it is still a total of 236.9 billion pounds in 2026, one of the highest productions forecasted that the U.S. has ever produced. The main focus of demand has been in higher-value protein products which have had a tighter supply with much of the fluid milk being sent to bottling.

AVERAGE CLASS III PRICES:

3 Month:	$16.81
6 Month:	$17.12
9 Month:	$17.28
12 Month:	$17.41

CHEESE:

Cheese continued the strength seem last week in the spot market which has been reflected in the futures market. Today, futures closed 0.7 to 4.1 cents higher. Buyers have been stocking up for upcoming holiday demand, and it has created a short-term buying frenzy trying to get their hands on supply. Some of the price actions the market has seen this month could be considered a rebound from a tough September. The next cold storage report will be a better indicator of the state of cheese available to the market and if this price strength continues.

BUTTER:

Butter futures were a bit disappointing towards the end of the trading day as the November contract settled 4 cents off the midday high of the day. Cash trade was higher today, but the actual loads traded were still minimal. Buyers have been stepping in to buy spot loads over the last week because prices were low and the holiday baking season is around the corner. What hasn't changed is the availability of cream which is still plentiful. Fundamentally, butter has some strong resistance to a long-term price increase.

OUTSIDE MARKETS SUMMARY:

December corn closed down 7.25 cents per bushel at $4.670; November soybeans closed down 7.75 cents at $12.5350 and December soybean meal closed down $2.30 per ton at $354.80. December Chicago wheat closed down 5.25 cents at $6.5525.

December live cattle closed down $0.325 at $228.025. November crude oil is up $2.25 per barrel at $103.66. The Dow Jones Industrial Average is down 36 points at 51,966 and the NASDAQ is up 290 points at 26,430.

Monday Midday Dairy Market Summary - Higher Cash Trade

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	10 Lower
SOYBEAN MEAL:	$0.39 Lower
LIVE CATTLE:	$1.375 Higher
DOW JONES:	15 Points Lower
NASDAQ:	330 Points Lower
CRUDE OIL:	$1.51 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 4.75 cents to close at $1.73 with 3 loads traded. The barrel cheese price increased 2 cents to close at $1.6400 with no loads traded. The dry whey price set is unchanged at the all-time high price of 89.5 cents. There were no loads traded. Class III futures are 7 to 41 cents higher. The butter price closed 2 cents higher at $1.3850 with 1 load traded. A nonfat dry milk increased 3.75 cents to close at $2.200 with 3 loads traded. Class IV futures are 40 cents to 69 cents higher in the deferred. contracts. Butter futures are 0.5 to 2.425 cents higher. Dry whey futures are unchanged. Cheese futures are 0.8 to 3.8 cents higher. Nonfat dry milk futures are 2.90 to 8 cents higher. 

Monday Morning Dairy Market Update - Will the Spot Market Excitement Continue?

OPENING CALLS:

Class III Milk Futures:	8 to 14 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	1.5 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	1 to 2 Higher
Soybean Meal Futures:	$0.50 to $1.50 Higher
Wheat Futures:	1 to 4 Higher

MILK:

USDA released its Livestock, Dairy and Poultry Outlook last week. Milk production continues to show growth with no slowdown in sight. The slaughter of dairy cows has increased year over year but remains low when compared to the last three years. Imports were strong from the January to August time frame, up 15.2% higher than last year, totaling 5.9 billion pounds on a milk-fat basis. On a skim-solids basis, imports were 4.5 billion pounds, a reduction of 2.5% from 2025. Exports were up 27.4% on a milk-fat basis and 3.3% on a skim-solids basis. Cheese, butter, dry whey and lactose were all the biggest factors in the year-over-year increase while dry skim milk products and whey protein concentrates all declined due to high prices.

CHEESE:

Cheese saw some very large increases when looking at exports in Friday's report. American-type cheeses were 21.1 million pounds higher from January to August, or 10.1% higher year over year for exports, coming in at a total of 231.4 million pounds. Other types of cheese totaled 844.4 million pounds exported from January to August, an increase of 172.5 million pounds or 25.7% higher.

BUTTER:

Butter had one of the biggest year-over-year increases in export products sold. In 2025, the U.S. shipped 104.8 million pounds of butter internationally. In 2026, the amount of butter exported gained 58 million pounds, totaling 162.7 million pounds. That is an increase of 55.3% more butter exports year over year. Domestically, butter gained 3.2% more demand, totaling 1.5722 billion pounds.