Tuesday Closing Dairy Market Update - Global Dairy Trade 2.5% Higher

GENERAL OVERVIEW:

The GDT Auction took place earlier Tuesday with an average winning price of $4,021, up 2.5% from Oct. 6. Cheddar had the biggest decrease from the previous auction, while Buttermilk Powder gained the most in value.

MILK:

Class III milk futures started off Tuesday strong, with the November contract trading over 40 cents higher. By the last trade of the day, the November contract had lost some ground, only 25 cents higher on the day. The settlement taking place in early afternoon still had the market up 39 cents at that time. The deferred 2027 contracts were all lower by the final bell. Class IV had minimal trading for the day, with the last trades unchanged to 4 cents higher. Wednesday, Class I and II prices will be announced, and later this week will be the Milk Production Report. To follow along with the USDA's Dairy Outlook report, the market expects milk production, while still historically high, to be reduced from the previous report.

AVERAGE CLASS III PRICES:

3 Month:	$17.05
6 Month:	$17.31
9 Month:	$17.43
12 Month:	$17.55

CHEESE:

The spot market for cheese has been on a major rally lately. Tuesday was no different, with Cheddar Blocks climbing another 7 cents and Barrels 8 cents higher. Cheese futures were higher as well, with the November contract up 3.5 cents near the close. The GDT was off pretty hard from the auction two weeks ago for Cheddar. Cheddar was down 7.4% at $3,645/MT. Mozzarella, on the other hand, was up 1.3%.

BUTTER:

Butter futures were mixed Tuesday afternoon, trading anywhere from down 0.5 cents to up 0.5 cents. Cash markets were 2.5 cents lower on the day with only one trade. There were a lot of outstanding bids and offers, 51 and 73 respectively, but prices were too far apart to make a trade. The GDT Auction had butter down 0.4% from the Oct. 6 event, coming in at $4,721/MT.The Cold Storage Report will be released Friday to give the market a better look at butter supplies available. Milk powders were the biggest demand of the auction, with increases in each category. Butter Milk Powder had the highest increase from the previous report, up 8.4% from two weeks ago.

OUTSIDE MARKETS SUMMARY:

December corn closed down 5 cents per bushel at $4.62; November soybeans closed down 5.25 cents at $12.4825 and December soybean meal closed down $6.10 per ton at $348.70. December Chicago wheat closed down 12 cents at $6.4325.

December live cattle closed up 1.950 at $229.45. November crude oil is down $1.87 per barrel at $97.82. The Dow Jones Industrial Average is up 529 points at 52,495 and the NASDAQ is down 6 points at 26,424.

Tuesday Midday Dairy Market Update - Cheddar Climbing Higher

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	7 Lower
SOYBEAN MEAL:	$6.65 Lower
LIVE CATTLE:	$1.825 Higher
DOW JONES:	502 Points Higher
NASDAQ:	59 Points Lower
CRUDE OIL:	$0.39 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 7 cents to close at $1.80 with 6 loads traded. The barrel cheese price increased by 8 cents to close at $1.7200 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 16 to 51 cents higher. The butter price closed 2.5 cents lower at $1.3600 with 1 load traded. A nonfat dry milk increased 1 cent to close at $2.210 with 5 loads traded. Class IV futures are 4 cents higher than the December contract. Butter futures are 0.5 lower to 0.5 cents higher. Dry whey futures are 0.25 cents lower to 0.75 cents higher. Cheese futures are 0.015 to 0.035 cents higher. Nonfat dry milk futures are 0.475 lower nearby to 1.925 cents higher in the deferred months. 

Tuesday Morning Dairy Market Update - Week Full of Market News and Reports

OPENING CALLS:

Class III Milk Futures:	10 to 25 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	3 to 5 Higher
Soybean Meal Futures:	$2.50 to $3.00 Lower
Wheat Futures:	4 to 5 Higher

MILK:

Milk futures have been on a big run up with support coming from product sold within the daily spot trade. With the amount of data that will be available this week from reports to the Global Dairy Trade (GDT) Auction, we will see how much of this recent rally can hold up to the news cycle. The Milk Production report has been reducing production expectations, yet the amount of milk the United States has produced this year is a daunting total.

CHEESE:

Cheese has also had an impressive rally lately. The GDT Auction was not friendly to cheese on the previous report. Cheddar and mozzarella were both down 3.9% and 3.7%, respectively. With the current cash trade so strong, futures have rallied quickly. From a world standpoint, is the strength seen over the last week only a U.S. buying story, or will the world see it as too expensive?

BUTTER:

Butter was relatively flat during the last GDT Auction. Most likely, the Cold Storage report later this week will give the market a better look at the current butter supply on hand. Many regions have struggled with available supply of 82% butterfat butter, but have expressed plenty of supply of 80% is available.