Friday Closing Dairy Market Update - Class III Futures Close Lower for the Week

GENERAL OVERVIEW:

Milk futures closed with mostly double-digit gains. Class III futures closed mostly higher despite weakness in the block cheese market. However, futures closed lower for the week. Class IV futures closed significantly higher for the week.

MILK:

Class III futures through the end of the year closed lower for the week, maintaining the bearish tone. The block cheese price declined during the second half of the week. The price fell to the lowest level since July 6. The price has declined 12.75 cents since August 13th, keeping the market in a downtrend. The real excitement stemmed from the continued strength in nonfat dry milk, pushing Class IV futures significantly higher for the week. The September through December contracts are above $19.00, where they have not been since early May.

AVERAGE CLASS III PRICES:

3 Month:	$16.76
6 Month:	$17.08
9 Month:	$17.20
12 Month:	$17.32

CHEESE:

For the week, blocks decreased 4.50 cents with 38 loads traded. The weekly average price is $1.5085. Barrels were unchanged from the close of the previous week with no loads traded. The weekly average price is $1.5730. Dry whey increased 3.50 cents with one load traded. The weekly average price is 72.05 cents.

BUTTER:

For the week, butter was unchanged with 93 loads traded. The weekly average price is $1.4625. Grade A nonfat dry milk increased 6.50 cents with 16 loads traded. The weekly average price is $1.8265. The nonfat dry milk price has increased 46.50 cents since the low on July 27.

OUTSIDE MARKETS SUMMARY:

December corn closed up 3.00 cents per bushel at $5.3650, November soybeans closed up 20.00 cents at $12.8800, and December soybean meal closed up $8.00 per ton at $348.90. December Chicago wheat closed up 23.25 cents at $7.8400. October live cattle closed down $1.20 at $211.73. October crude oil is down $0.18 per barrel at $83.35. The Dow Jones Industrial Average is down 28 points at 53,560, with the NASDAQ down 139 points at 26,402.

 

Friday Midday Dairy Market Summary - Milk Futures Show Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	15 Higher
SOYBEAN MEAL:	$7.70 Higher
LIVE CATTLE:	$0.62 Lowerr
DOW JONES:	32 Points Higher
NASDAQ:	120 Points Higher
CRUDE OIL:	$0.19 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1.25 cents to close at $1.4825 with 10 loads traded. There were 11 unfilled bids and 12 uncovered offers remaining at the close of spot trading. The barrel cheese price declined 1.00 cent to close at $1.5650 with no loads traded and one uncovered offer. The dry whey price gained 0.75 cent to close at 73.75 cents with no loads traded. Class III futures are 4 cents lower to 12 cents higher. The butter price gained 0.25 cent to close at $1.4625 with 3 loads traded. There were no unfilled bids and 53 uncovered offers remaining at the close. Grade A nonfat dry milk gained 1.50 cents to close at $1.8650 with 3 loads traded. Class IV futures are 7-35 cents higher. Butter futures are 2.47 cents lower to 0.15 cent higher. Dry whey futures are steady. Cheese futures are 0.70 cent lower to 0.90 cent higher. Nonfat dry milk futures are 1.50 -- 3.95 cents higher.

Friday Morning Dairy Market Update - Lower Calf Prices Reduce Farm Income

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	5 to 15 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	5 to 6 Higher
Soybean Futures:	7 to 8 Higher
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	6 to 7 Higher

MILK:

There is not much to say about the milk market as fundamentals remain similar to what they have been for some time. The milk supply is sufficient and expected to increase as the summer winds down and cow comfort improves. The significant aspect that is a concern is declining calf prices and the impact it will have on cash flow. It is uncertain whether lower calf prices will be here to stay or whether this is a temporary weakness in the market. The beef cattle inventory remains at the lowest level in 75 years, and that will not change anytime soon. The government is opening up for more beef imports to reduce consumer prices. How much impact this will have, and the duration, are uncertain. This, on top of already low milk prices, will reduce farm income.

CHEESE:

Traders seem to realize cheese prices have little upside potential for the foreseeable future. With sufficient supplies available, buyers see no need to be aggressive. Buying may be increasing seasonally, but without fanfare. Increased production is satisfying increased demand.

BUTTER:

Butter supplies remain plentiful with sellers willing to sell on the spot market. The daily volume of offers on the spot market will keep the upside price potential limited.