Friday Closing Dairy Market Update - Cheese Prices Close Higher for the Week

GENERAL OVERVIEW:

After being lower most of the day, Class III futures found some strength into the close. The same could not be said for Class IV futures, as they were steady to lower. Barrels have now gone five consecutive weeks with one load traded. Butter declined to a new low for the year.

MILK:

Milk futures closed lower for the week despite spot cheese prices improving slightly since the end of last week. The bearish attitude in the market cannot be shaken under the current fundamentals. The term being used by many is that the market is awash in milk. Yes, milk production is significantly higher than a year ago, yet milk plants are not overwhelmed with milk. More manufacturing capacity has come online, but spot milk prices up until recently have been higher than they were a year ago. Understandably, spot milk prices will decline as schools close for a few weeks and bottling slows. Spot milk prices will decline, as the market needs to clear the extra milk supply. Next week will be full of major reports. The November Milk Production report will be released on Monday. The Cold Storage report will be released on Tuesday and should bring cold storage reports up to date. The November Livestock Slaughter report will be released on Wednesday. The markets will then be closed on Thursday and open on Friday.

AVERAGE CLASS III PRICES:

3 Month:	$15.62
6 Month:	$15.94
9 Month:	$16.39
12 Month:	$16.70

CHEESE:

For the week, blocks increased a penny with 21 loads traded. The weekly average price is $1.3805. Barrels increased 0.75 cent with no loads traded. The weekly average price is $1.4040. There has only been one load of barrels traded over the course of five weeks. Dry whey declined 6 cents with seven loads traded. The weekly average price is 72.60 cents. The block price is only 1.50 cents above the low of the year.

BUTTER:

For the week, butter declined by 6.50 cents with 61 loads traded. The weekly average price is $1.4480. Grade A nonfat dry milk declined by 0.25 cent with 11 loads traded. The weekly average price is $1.1605. Butter made a new low for the year on Friday. This has been the lowest price since Feb. 19, 2021.

OUTSIDE MARKETS SUMMARY:

March corn closed down 0.75 cent per bushel at $4.4375, January soybeans closed down 3 cents at $10.4925 and January soybean meal closed down $0.80 per ton at $297.60. March Chicago wheat closed up 2 cents at $5.0975. February live cattle closed up $2.40 at $230.80. February crude oil is up $0.55 per barrel at $56.55. The Dow Jones Industrial Average is up 183 points at 48,135, with the NASDAQ is up 301 points at 23,308.

Friday Midday Dairy Market Summary - Butter Falls to a New Low

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	2 Lower
SOYBEAN MEAL:	$0.70 Lower
LIVE CATTLE:	$2.22 Higher
DOW JONES:	313 Points Higher
NASDAQ:	265 Points Higher
CRUDE OIL:	$0.65 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 0.75 cent, closing at $1.36 with four loads traded. The barrel cheese price increased 2 cents, closing at $1.42 with no loads traded. The price increased as a buyer became more aggressive. There was an offer above the market, with no interest in reducing the offer to accomplish business. The dry whey price remained unchanged at 70.50 cents with no loads traded. Class III futures are 2 cents lower to 4 cents higher. The butter price declined 2.50 cents, closing at $1.4150 with 29 loads traded. There were 18 unfilled bids and eight uncovered offers remaining at the close of spot trading. This is a new low for the year. Grade A nonfat dry milk increased 0.25 cent to close at $1.1575 with no loads traded. Class IV futures are 2 to 6 cents lower. Butter futures are steady to 3.52 cents lower. Dry whey futures are 0.75 to 1.75 cents lower. Cheese futures are 0.30 cent lower to 1.10 cents higher.

Friday Morning Dairy Market Update - Mixed Price Activity Expected Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The pressure on milk futures did not carry over into the overnight trade as the market adjusted to weaker cash prices. The weakness on Thursday eliminated any hope prices could stabilize through the holidays.

The milk supply is plentiful and is not expected to decline anytime soon. The November Milk Production report will be released Monday. The expectations are for production to be significantly higher than a year ago. There is little bullishness to be found in the market. The passage of the Whole Milk for Healthy Kids Act is positive for allowing 2% and whole milk back in schools, but it is not expected to have much impact on milk prices.

CHEESE:

The block price may be heading back down to the lows again, as the recent buying interest has been filled. Manufacturers will continue to offer cheese to the spot market to limit building inventory at the plant level. Barrels continue to see no trading activity. Over the course of the past five weeks, there has been only one load of barrels traded on the spot market.

BUTTER:

The price is only a penny above the low of the year. The weakness on Thursday may indicate the low will be revisited Friday or next week. Much of the holiday buying is complete with only regular demand having to carry the baton. Strong butter production keeps supplies readily available.