Wednesday Midday Dairy Market Summary - Spot Prices Increase

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	26 Higher
SOYBEAN MEAL:	$4.50 Higher
LIVE CATTLE:	$0.62 Higher
DOW JONES:	39 Points Lower
NASDAQ:	515 Points Lower
CRUDE OIL:	$1.78 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 2.25 cents to close at $1.4275 with 16 loads traded. There were 6 unfilled bids remaining at the close of spot trading. The barrel cheese price increased 3.00 cents, closing at $1.44 with no loads traded. The dry whey price increased 2.00 cents, closing at 72.50 with no loads traded. Class III futures are 2 cents lower to 46 cents higher. The butter price increased 2.75 cents, closing at $1.6075 with 3 loads traded. There were 16 unfilled bids and 3 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 3.75 cents to close at $1.5375 with no loads traded. This is the highest price since October 4, 2022. Class IV futures are 28-43 cents higher. Butter futures are 0.15 – 3.00 cents higher. Dry whey futures are 0.22 cent lower to 1.22 cents higher. Cheese futures are 0.50 – 3.60 cents higher. The January Federal Order class prices will be announced this afternoon.

Wednesday Morning Dairy Market Update - Limited Price Direction Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	2 to 8 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures have shown higher prices due to increased support from cash prices. Although futures are a far cry from where they should be for dairy farms to be profitable, they do show some promise for higher prices. Class IV futures have shown greater strength as the higher butter price and the strength of nonfat dry milk have moved futures above Class III again. Hopefully, the January class prices will be the lowest for the year. Traders anticipate a January Class III price of $14.59 and a Class IV price of $13.57. The Federal Order prices will be released Wednesday afternoon.

CHEESE:

Cheese prices may have difficulty increasing much further under the current market fundamentals. Strong milk production will keep manufacturing higher. This should keep sufficient supplies available for demand. Buyers may remain comfortable with the current supply and the continued supply, leaving them less aggressive in the spot market.

BUTTER:

The stability in the spot butter price over the past two days gives the impression that the market may have found support. The large amount of unfilled bids remaining at the close of spot trading on Tuesday suggests further gains are possible. The December Dairy Products report will be released Thursday, providing a better perspective on supply and demand.

Tuesday Closing Dairy Market Update - Correction: December Income Over Feed Was $9.42

GENERAL OVERVIEW:

Milk futures were higher in most contracts as spot cheese and nonfat dry milk prices increased. The front-month February Class III contract struggled and could not move into positive territory despite the increase in cheese prices. The December income over feed price was $9.42.

MILK:

I made an error on Monday in reporting the December income over feed price. The correct price was $9.42. This results in a DMC payment of $0.08 per cwt and the only payment under the program in 2025. This is the first payment under the DMC program since February 2024. The uncertainty of the market has traders running from one side of the ship to the other in an attempt to outguess the market and make a short-term profit. Most of the weakness on Monday was regained today. It was surprising to see the strength in Class III contracts due to the decline in the dry whey price. Today was the final trading day for the January contract, with the January Federal Order prices to be announced on Wednesday. Traders anticipate the Class III price to be $14.59 and the Class IV price to be $13.57.

AVERAGE CLASS III PRICES:

3 Month:	$16.25
6 Month:	$16.90
9 Month:	$17.23
12 Month:	$17.27

CHEESE:

Cheese prices give the impression they will remain in a sideways range for the time being. Prices will remain choppy, but it appears the market may have found a bottom. It is difficult to say when prices will develop an uptrend. There remains a risk of lower prices if milk production continues to grow and demand does not.

BUTTER:

Butter seems to be in a better position than cheese, with greater potential for further strength. The Grade A nonfat dry milk price closed at the highest price since Oct. 13, 2022. Demand has improved substantially, with buyers aggressively purchasing available supply. The strength of nonfat is providing substantial support to Class IV futures.

OUTSIDE MARKETS SUMMARY:

March corn closed up 2.75 cents per bushel at $4.2850, March soybeans closed up 5.50 cents at $10.6575 and March soybean meal closed down $2.60 per ton at $291.90. March Chicago wheat closed up 1.00 cent at $5.2875. April live cattle closed up $2.10 at $241.63. March crude oil is up $1.71 per barrel at $63.85. The Dow Jones Industrial Average is down 167 points at 49,241, with the NASDAQ is down 337 points at 23,255.