Thursday Closing Dairy Market Update - Markets Decline

GENERAL OVERVIEW:

This morning USDA announced a plan to purchase $472.5 million of American-grown, American-produced food to help support farmers and those in need of food. $165.5 million was allocated for dairy purchases. Secretary Rollins says this will take American milk and cheese straight from our farms to those in need rather than being wasted.

MILK:

Class III futures exhibited some major price divergence today as the November contract was trading over 40 cents lower this afternoon while December and beyond were trading as much as 20 cents higher. Class IV traded similarly with November trading as much as 21 cents lower this afternoon while the January contract was 45 cents higher. The announcement released this morning for the USDA to purchase American grown food products gave new hope to milk and cheese futures as the last time a similar program was implemented, it successfully boosted the market. The "Farmers to Families Food Box" program in 2020-2021 provided fresh produce, dairy, cooked meats and seafood valued at over $5 billion to needy Americans. While this is significantly less of an investment, it still should help with dairy product utilization. Nonfat Dry Milk is the biggest market mover today with most contracts trading 4 cents higher, the current limit for daily trade. Strength was due to spot market moving 4.7 cents higher.

AVERAGE CLASS III PRICES:

3 Month:	$16.78
6 Month:	$16.75
9 Month:	$16.87
12 Month:	$17.08

CHEESE:

The spot market experienced the first day of lower priced trade for cheddar cheese blocks of the week, trading 1 cent lower than yesterday. Cheese futures, much like we see in milk futures are lower on the nearby contracts this afternoon with the November down 3.9 cents near the end of the day and the January 2.2 cents higher. Some of the deferred strength could be accounted for the announcement for dairy product purchases to come for needy Americans.

BUTTER:

Butter also received a boost from the spot market today, which closed 3.5 cents higher. Futures have responded positively with the afternoon trade up 0.875 cents on the November board month. Nearby seasonal baking demand is suspected for current strength.

OUTSIDE MARKETS SUMMARY:

December corn closed down .50 cent per bushel at $4.5125, January soybeans closed down 3.25 cents at $12.3475 and December soybean meal closed down $6.40 per ton at $329.30. December Chicago wheat closed up 4.75 cents at $6.0375.

December live cattle closed down $1.03 at $226.30. December crude oil is down .78 per barrel at $102.00. The Dow Jones Industrial Average is down 132 points at 52,342 and NASDAQ is down 365 points at 26,184.

Thursday Midday Dairy Market Summary - Cash Markets Rally

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	6 Lower
SOYBEAN MEAL:	$6.50 Lower
LIVE CATTLE:	$1.125 Lower
DOW JONES:	198 Points Lower
NASDAQ:	29 Points Lower
CRUDE OIL:	$1.50 Lower

MIDDAY MARKET UPDATE:

The block cheese price decreased by 1 cent to close at $1.7350 with no loads traded. The barrel cheese price was unchanged at $1.7250 with no loads traded. Dry whey increased by 1 cent, closing at 82.0 cents with no loads traded. Class III futures are 31 cents lower to 12 cents higher. The butter price increased by 3.5 cents, closing at $1.32 with four loads traded. Grade A nonfat dry milk increased 4.75 cents to close at $2.0875 with no loads traded. Class IV futures are 1 to 21 cents lower. Butter futures are 1.675 cents lower to 0.85 cents higher. Dry whey futures are unchanged to 1.225 cents lower. Cheese futures are 2.6 cents lower to 0.9 cents higher. Nonfat dry milk futures are limit up (4 cents) higher.

Thursday Morning Dairy Market Update - Will Wednesday's Price Volatility Continue

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	1 to 10 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	7 to 10 Lower
Soybean Meal Futures:	$1.50 to $2.00 Lower
Wheat Futures:	1 to 2 Lower

MILK:

Volatility is the best way to describe the Class III market as well as dry whey and nonfat dry milk Wednesday. Class III struggled to find direction as it traded mixed most of the day, with some midday and end of the trading session ticks higher from cheese strength. Class IV has had limited trading this week but bids and offers on the futures contracts showed flat trade is possible. Dry whey is still reaping the benefits of a protein market boom, but has found its limit where world market alternatives can be found cheaper. Overnight markets have Class III trading 13 cents lower to 11 cents higher.

CHEESE:

The cheese story has been centered around cash trade lately. Amid every other market falling apart, cheddar cheese barrel and blocks inched another 0.5 cent higher on Wednesday. Futures struggled with outside pressure from the dairy complex to hold onto much for gains, but the demand is there as the holidays quickly approach.

BUTTER:

Butter markets were mixed throughout Wednesday with the cash prices weaker. Seasonal baking will keep the nearby trade looking for opportunities to purchase butter when prices are best. A bit of a concerning fact on Wednesday was the extremely large amount of spot loads offered on the cash market. There were a normal number of bids available, but the offers greatly outweighed the bids into the close. This could be an indication of manufacturers trying to offset large quantities of product. However, with the Cold Storage report showing slightly less inventory from last month and production down from the previous month, it could just be timing of available product and the possible opportunity to sell with seasonal baking demand.