Thursday Closing Dairy Market Update - Cheese Surge Ignites Class III Rally

GENERAL OVERVIEW:

Class III Milk went above and beyond today, rallying as high as 28 cents on the November contract off of strength in the cheese market.

MILK:

Class III futures saw some fireworks this afternoon, with the November contract gaining 28 cents on the day and December shortly behind at 27 cents higher. The October contract is still showing resistance, with the futures falling 14 cents today despite the deferred contracts rallying. This divergence highlights the abundance of milk supply in the short term but the expectation of demand as the year closes out.

AVERAGE CLASS III PRICES:

3 Month:	$15.86
6 Month:	$16.44
9 Month:	$16.75
12 Month:	$16.95

CHEESE:

Cheese is the star of the week with another strong day in the cash market. Blocks climbed an additional 1.5 cents today to 1.3550, increasing every day since the low placed on Sept. 30. Experts believe increasing cheese demand is derived from seasonal buying. There have been 37 loads of blocks traded this week. Barrels, on the other hand, have been stagnant, although barrels have been trending higher than blocks, so the market has not been surprised at the increased trade price of blocks. If futures are any indication of what is to come, tomorrow should be another great day for cheese sales. Futures are currently up 2.6 to 2.9 cents in the November and December contracts.

BUTTER:

Ouch is all we can say for butter. Futures are currently 1.65 to 4.275 cents lower. The cash market has not been friendly either, with trade down 4 cents on the day. Cream supplies are readily available, but the final product has not been moving at the pace of what has been produced.

OUTSIDE MARKETS SUMMARY:

December corn closed down 1.75 cents per bushel at $5.0025, November soybeans closed down 10.00 cents at $12.8750 and December soybean meal closed down $8.20 per ton at $357.60. December Chicago wheat closed down 3.25 cents at $6.8325. December live cattle closed down $0.23 at $223.55. November crude oil is up 2.55 per barrel at $90.83. The Dow Jones Industrial Average is up 51 points at 51,231 and the NASDAQ is down 345 points at 27,193.

Fluid Milk and Cream - Western U.S. Report 41

Milk in the Western region shifted to a more balanced tone this week, as fluid and cream supplies leveled out for manufacturers and producers. Production in the West remains seasonally steady and has yet to reflect the typical fall uptick cooler weather brings. 

California contacts report milk is beginning to tighten, and spot milk requests are emerging, though spot availability remains limited. 

The Mountain States experienced cooler weather as well, with a more balanced milk flow and reduced cream volume. 

No changes were reported in milk flows for the Pacific Northwest or Arizona/New Mexico, though some Arizona sources noted a decline in cream availability this week. 

Class I and II demand is stronger, while Class III and IV demand remains steady. Hauling costs continue to present challenges for handlers and manufacturers, with little relief expected. 

Cream demand is moderate, and fewer loads were available overall this week. Condensed skim milk availability held steady week over week, though demand declined, with limited interest reported for spot loads.

Thursday Midday Dairy Market Summary - Class III Deferred Months Higher, Butter Lower

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$0.76 Lower
LIVE CATTLE:	$0.875 Lower
DOW JONES:	93 Points Lower
NASDAQ:	371 Points Lower
CRUDE OIL:	$27.76 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 1.5 cents to close at $1.3550 with 12 loads traded. The barrel cheese price remained unchanged at $1.4525 with no loads traded. There were 8 bids and 1 offer left remaining at the close. The dry whey price was unchanged, closing at 85.0 cents with no loads traded. Class III futures are 7 cents lower on the Oct while to 13 to 20 cents higher on the deferred contracts. The butter price fell another 4 cents today, closing at $1.2500 with 2 loads traded. There were 1 unfilled bid and 4 uncovered offers remaining. Grade A nonfat dry milk increased 0.5 cents to close at $2.2600 with 1 load traded. Class IV futures are 10 cents higher on the December contract with limited other trading. Butter futures are 4.174 to 6.175 cents lower. Dry whey futures are 0.45 to 0.575 cents lower. Cheese futures are mixed from 0.05 cents lower to 2.4 cents higher. Nonfat dry milk futures are 0.75 to 2 cents higher.