Friday Midday Dairy Market Summary - Block Cheese Shows Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$7.30 Lower
LIVE CATTLE:	$0.35 Lower
DOW JONES:	213 Points Higher
NASDAQ:	309 Points Higher
CRUDE OIL:	$1.57 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 1.25 cents to close at $1.3150 with 8 loads traded. The barrel cheese price remained unchanged at $1,.34256 with no loads traded. The dry whey price increased 1.00 cent to close at 82.50 with one load traded. Traders did not respond with higher Class III futures prices. Contracts range from 38 cents lower to 5 cents higher, with contracts through February posting losses. The butter price remained unchanged at $1.3400 with no loads traded. There were 10 unfilled bids and 34 uncovered offers remaining. Grade A nonfat dry milk increased 1.50 cents to close at $2.22 with 5 loads traded. This is the highest price since May 19th. Class IV futures are 14 cents lower to 30 cents higher. Butter futures are 0.25 cent lower to 2.47 cents higher. Dry whey futures are 0.30 cent lower to 0.25 cent higher. Cheese futures are 0.10 -- 3.70 cents lower. Nonfat dry milk futures are 0.85 cent lower to 1.45 cents higher. 

Friday Morning Dairy Market Update - Limited Price Movement Expected Ahead of the Weekend

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	5 to 8 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 7 Lower
Soybean Meal Futures:	$4 to $5 Lower
Wheat Futures:	3 to 4 Higher

MILK:

The strength in Class III milk futures may be short-lived if cheese follows the pattern it has over the past few months. Price strength has been short-lived, and that pattern may not change. There is little reason for cheese and butter buyers to be aggressive. Milk production is sufficient for both bottling and manufacturing demand. Both farm and manufacturing expansions continue to take place. Class IV futures showed trading activity overnight in the October and January contracts. It is unusual to see overnight trading activity in Class IV contracts.

CHEESE:

The block cheese price is expected to see limited upside potential. It is expected to be choppy and remain lower for the foreseeable future. Cheese production is sufficient for demand and maintain inventory. Demand will need to improve, or supplies will increase and keep cheese prices lower.

BUTTER:

Butter will follow the same pattern as cheese due to increasing production and sufficient supplies. Price should be increasing seasonally as buyers look ahead to holiday demand, but the volume of butter available to the market keeps buyer interest satisfied without them having to bid the price higher.

Thursday Closing Dairy Market Update - August Income Over Feed Was $9.34

GENERAL OVERVIEW:

Class III futures finally showed strength. Traders covered their short positions, but it may be short-lived unless the block cheese price increases further. Class IV futures extended gains due to the increase in nonfat dry milk. August income over feed was $9.34.

MILK:

Class III milk futures finally saw strong gains. The November contract moved above $16.00 at one point today, with March back above $17.00. The question is whether this will hold as the overall fundamentals of the market remain bearish. It is difficult to say whether seasonal buying interest will continue, as there is sufficient cheese for demand. Traders focused on the minor increase in nonfat dry milk rather than the weakness in butter in Class IV futures. The average prices for the August income over feed were released. The average corn price was $4.45, up $0.19 per bushel from July. The premium/supreme alfalfa hay price was $243.00 per ton, up $1.00 per ton from July. The soybean meal price was $320.30 per ton, down $17.66 per ton from July. The all-milk price was $19.80, down $0.50 from July. The result is an income over feed price of $9.34. This is the lowest price since February.

AVERAGE CLASS III PRICES:

3 Month:	$15.78
6 Month:	$16.33
9 Month:	$16.62
12 Month:	$16.85

CHEESE:

The bounce in the block cheese price was welcomed, but it may be short-lived. That is the pattern we have seen for quite some time, and the fundamentals do not suggest otherwise. Strong cheese production keeps sufficient milk available for demand and then some.

BUTTER:

It seemed buying interest was increasing earlier in the week as quite a few infilled bids remained at the close of spot trading. However, that changed today as there were a lot of uncovered offers remaining at the close. It was the largest number of uncovered offers that were ever seen remaining at the close of butter trading. Seasonal buying may not be sufficient to lift prices.

OUTSIDE MARKETS SUMMARY:

December corn closed up 1.50 cents per bushel at $5.0225, November soybeans closed down 9.00 cents at $12.8400, and December soybean meal closed down $3.60 per ton at $353.30. December Chicago wheat closed up 7.00 cents at $6.8275. December live cattle closed up $0.48 at $223.18. November crude oil is up $2.45 per barrel at $92.87. The Dow Jones Industrial Average is up 21 points at 50,927, with the NASDAQ up 11 points at 26,872.