Thursday Closing Dairy Market Update - Volatility in Futures

GENERAL OVERVIEW:

Dry whey reached another new high today in the spot market while futures fell apart. Cheese and Butter follow along with cash trade, leading futures higher while NFDM slips lower.

MILK:

Class III futures started off the day with over 40 cents higher on the November contract but lost some ground by this afternoon. While futures at the time of settlement were still trading higher, currently there are deferred contracts trading lower, while the November is still up 33 cents. Class IV Milk settled 17 to 39 cents lower. Milk has an uphill battle with the amount of production the United States has produced this year. The components have given some excitement to Class III futures, although the market is feeling heavy with how quickly the market has rallied this week despite a substantial change in the abundance of product available.

AVERAGE CLASS III PRICES:

3 Month:	$16.60
6 Month:	$17.01
9 Month:	$17.20
12 Month:	$17.37

CHEESE:

Cheese prices had a big move higher today. Cheddar Cheese Blocks jumped 12.25 cents higher while Barrels rallied 11.75 cents. No loads of barrels actually traded; however, this was the first price move in nearly a month. Futures initially traded higher, especially around the spot price trade, yet lost a little of the gains by this afternoon. Stocking up on holiday needs seems to be the cause of the cheese firmness this week. Mozzarella and Provolone were the highest demand on last Friday's market recap, so we'll get a better look tomorrow on what is trading in each region.

BUTTER:

Butter futures had a mixed day. The October contract did not trade as we approach the end of that contract. November settled 1 cent higher but was trading 2 cents higher in the late afternoon trade. December was off 0.475 cents at settlement. Fundamentals have not changed for butter. Availability is high, and cream supplies are not slowing down.

OUTSIDE MARKETS SUMMARY:

December corn closed down 2.75 cents per bushel at $4.7800, November soybeans closed down 14.25 cents at $12.6300 and December soybean meal closed down $4.70 per ton at $359.80. December Chicago wheat closed down 3.25 cents at $6.7000.

December live cattle closed up $2.13 at $227.25. November crude oil is up 2.60 per barrel at $97.69. The Dow Jones Industrial Average is up 556 points at 52,177 and the NASDAQ is up 20 points at 26,713.

Fluid Milk and Cream - Western U.S. Report 42

Cooler weather is moving into the western region, strengthening milk production. Some contacts in California report year-over-year and month-to-month increases in milk output, though the overall supply situation remains somewhat tight due to high heat in Southern California despite cooler evenings. Arizona and New Mexico are experiencing some cooling, which is helping to keep milk production steady. The Pacific Northwest is seeing cool nights, good milk production, and available spot loads. 

Farms in Washington report positive Highly Pathogenic Avian Influenza (HPAI) tests in dairy cows. Producers are working closely with veterinary experts and regulatory agencies to ensure biosecurity measures are in place and to limit further transmission. No impact on overall milk output or availability has been reported at this time. 

Class I demand is steady with no week-over-week changes. Class II demand is up as holiday baking approaches and cream is drawn for extended-shelf-life production. Class III remains steady with contractual loads being met. Class IV is marginally down due to increasing Class II and Class III processing, although butter manufacturers are not reporting any scheduling delays or issues receiving contractual loads. Condensed skim demand is strong, and availability remains tight, with contacts stating they are buying anything they can find.

Thursday Midday Dairy Market Update - Cheese, Butter and Dry Whey Surge; NFDM Falls

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	12 Lower
SOYBEAN MEAL:	$3.70 Lower
LIVE CATTLE:	$1.95 Higher
DOW JONES:	429 Points Higher
NASDAQ:	96 Points Lower
CRUDE OIL:	$2.95 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 12.25 cents to close at $1.6525 with one load traded. There were eight bids remaining at the close. The barrel cheese price finally moved for the first time in nearly a month to increase 11.75 cents to close at $1.5700 with no loads traded. There were 12 bids outstanding by the close. The dry whey price set a new record high again Thursday, at 89.0 cents, an increase of 0.50 cents. There were two loads traded. Class III futures are 10 to 48 cents higher. The butter price closed 4 cents higher at $1.3450 with four loads traded. There were four bids and 85 offers remaining at the close. Grade A nonfat dry milk fell 6 cents to close at $2.15 with six loads traded. Class IV futures are 17 to 39 cents lower. Butter futures are 0.5 to 2.025 cents higher. Dry whey futures are 0.4 to 1.975 cents lower. Cheese futures are 0.1 to 5.2 cents higher. Nonfat dry milk futures are 3.475 to 5.425 cents lower.