Wednesday Closing Dairy Market Update - November Class III Milk Price is $17.18

GENERAL OVERVIEW:

Class III futures held up surprisingly well again today despite significant declines in the cheese prices. The November class prices were released with Classes II and IV declining and Class III increasing from the previous month. The Global Dairy Trade auction trade-weighted average declined 4.3%.

MILK:

Class III milk futures held surprisingly well, with most contracts closing higher despite the significant decline of the spot cheese prices again. It gives the impression that traders may believe the bottom is nearby. Of course, there is no indication of that based on the negative fundamentals. The USDA released the Federal Order class prices for November. The Class II price is $14.54, down $1.48 from October and $6.98 below November 2024. The Class III price is $17.18, up $0.27 from October, but down $2.77 from a year ago. The Class IV price is $13.89, down $0.41 from October and $7.23 lower than November 2024. The Global Dairy Trade auction trade-weighted average fell 4.3% and was the eighth consecutive event posting a decline. There were 34,282 metric tons sold at an average price of $3,507. Anhydrous milk fat fell 9.8% to $5,902 per metric ton or $2.68 per pound. Butter fell 12.4% to $5,169 per metric ton or $2.34 per pound. Buttermilk powder gained 1.8% to $2,903 per metric ton or $1.32 per pound. Cheddar cheese jumped 7.2% to $4,639 per metric ton or $2.10 per pound. Lactose gained 4.2% to $1.250 per metric ton or $0.57 per pound. Skim milk powder declined 1.6% to $2,498 per metric ton or $1.13 per pound. Whole milk powder declined 2/4% to $3,364 per metric ton or $1.53 per pound. Mozzarella declined 1.0% to $1.44 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$15.61
6 Month:	$15.87
9 Month:	$16.26
12 Month:	$16.56

CHEESE:

Spot cheese prices remain unable to find a bottom as buyers continue to hold back on their purchases due to plentiful supplies. The one consolation is that prices have been this low in early 2024, from which prices rallied substantially. Fundamentals are different, but low prices cure low prices. Hopefully, there will be some rebound.

BUTTER:

The butter price seems to have found some stability, but whether that might continue is anyone's guess. The potential for increased butter production after the holiday season is likely, as cream demand from other Class II products slows. The increase in holiday demand is providing some support.

OUTSIDE MARKETS SUMMARY:

March corn closed down 6.50 cents per bushel at $4.4350, January soybeans closed down 9.00 cents at $11.1575 and January soybean meal closed down $.30 per ton at $311.30. March Chicago wheat closed down 2.75 cents at $5.3825. February live cattle closed up $1.10 at $221.90. January crude oil is up $0.31 per barrel at $58.95. The Dow Jones Industrial Average is up 408 points at 47,883, with the NASDAQ up 40 points at 23,454. 

Wednesday Midday Dairy Market Summary - Cheese Continues to Fall

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	7 Lower
SOYBEAN MEAL:	$0.30 Lower
LIVE CATTLE:	$1.40 Higher
DOW JONES:	189 Points Lower
NASDAQ:	25 Points Lower
CRUDE OIL:	$0.64 Higher

MIDDAY MARKET UPDATE:

The block cheese price fell 4.00 cents, closing at $1.3950 with five loads traded. The barrel cheese price fell 5.50 cents, closing at $1.4450 with no loads traded. They're both new lows for the year. Blocks fell to the lowest level since March 22, 2024, and barrels to the lowest level since April 1, 2024. The dry whey price held steady at 73.00 cents with no loads traded. Class III futures are 14 cents lower to 2 cents higher. The butter price gained 0.50 cent with five loads traded. Grade A nonfat dry milk gained 1.25 cents to close at $1.1575 with no loads traded. Class IV futures have only traded in the April contract at 15 cents higher. Butter futures are 1.50 cents lower to 0.50 cent higher. Dry whey futures are steady to 0.97 cent higher. Cheese futures are 1.50 cents lower to 0.20 cent higher. The November Federal Order class prices will be announced this afternoon.

Wednesday Morning Dairy Market Update - Market Remains Void of Bullish News

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	1 to 3 Higher
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	1 to 2 Lower

MILK:

There is little bullish fundamental news to provide support to the market. One has to wonder just how low prices will go until demand increases and/or supply decreases. The milk production and livestock slaughter reports indicate culling has increased. However, that could have a long-term impact on the market. Currently, milk production remains strong and significantly above a year ago. This is expected to continue into next year despite increased culling. USDA will release the November Federal Order class prices Wednesday afternoon. The trade estimates a Class III price of $17.16 and a Class IV price of $13.83.

CHEESE:

Cheese supplies are plentiful with buyers unconcerned. Prices continue to decline with both blocks and barrels falling to new lows for the year. As long as sellers continue to offer supplies to the market, buyers will hold out for lower prices.

BUTTER:

The butter price may have found stability for a brief time. The increased holiday demand may be enough to hold prices in a sideways trading range. The higher production of Class II products for the holiday season has been utilizing some cream supplies. However, once that is finished, more cream will be available for churning, resulting in higher butter output.