Tuesday Morning Dairy Market Update - Cheese and Class III Milk Higher

OPENING CALLS:

Class III Milk Futures:	1 to 20 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	4 to 6 Lower
Soybean Meal Futures:	$4 to $6.50 Lower
Wheat Futures:	2 to 4 Lower

MILK:

Milk demand across the United States is steady for Class III and Class IV in the Midwest and West. The Central region is seeing steady to higher milk production. Class III spot milk prices range from $1 under to $4 over class price. Conventional and organic dairy ads were down last week, dropping 22% for conventional and 21% for organic.

CHEESE:

Cheese had the highest number of advertisements last week as usual, although it was lower than the previous week. Cheese demand has been steady to strong over the last week with most plants running strong production schedules. Diesel prices have caused some challenges, impacting retail costs through production and delivery.

BUTTER:

Butter production has been steady across the country. Some Eastern plants report heavy butter stocks and are allowing maintenance downtime. With anticipation for holiday demand, retail has been growing stocks. Food service demand for butter has been steady to lower. The Western region is seeing tight stocks for 82% butter with some contracts reporting no availability through the end of the year. Eighty percent salted is readily available with churns running at full speed for holiday baking. The Central region is still seeing strong demand for export of cream to Mexico for processing.

Monday Closing Dairy Market Update - Nonfat Dry Milk Leads Class IV Higher

GENERAL OVERVIEW:

Nonfat Dry Milk futures rallied into the close today with anywhere from a 0.475 cent gain on the October contract to a 3.55 cent gain on the February contract. This led the way for Class IV to close unchanged to 43 cents higher.

MILK:

In addition to a futures rally, Nonfat Dry Milk also saw a small appreciation in value in the cash market of 0.25 cents higher, to close at $2.27. That is the highest price NFDM has seen since May 18, just shy of the $2.4950 record high set in early May. Class IV has been responding well to the rally in NFDM, yet butter has limited how high it can go. Class III was mixed today with some pressure on the October and November contracts, much like we've seen in the past week, yet still has strength in the deferred futures contracts.

AVERAGE CLASS III PRICES:

3 Month:	$15.87
6 Month:	$16.48
9 Month:	$16.79
12 Month:	$17.04

CHEESE:

Cheese futures saw slight gains today on nearly every board month outside of October. The cash market is still gaining for cheddar cheese blocks, up another 0.5 cents today, but barrels have been unchanged for weeks.

BUTTER:

Butter futures were mostly lower today, with only the October showing slight gains. The deferred month were 1 to 2.25 cents lower on the day. Overall supply of cream still suppresses any long-term chance of a rally.

OUTSIDE MARKETS SUMMARY:

December corn closed up 3.25 cents per bushel at $4.8300, November soybeans closed down 4.25 cents at $12.8775 and December soybean meal closed up $3.10 per ton at $368.70. December Chicago wheat closed up 1.25 cents at $6.7225.

December live cattle closed down $0.45 at $226.60. November crude oil is up 1.89 per barrel at $93.74. The Dow Jones Industrial Average is up 195 points at 51,850 and the NASDAQ is down 120 points at 27,245.

Monday Midday Dairy Market Summary - Mixed Dairy Trade

OUTSIDE MARKETS SUMMARY:

CORN:	2 Higher
SOYBEANS:	6 Lower
SOYBEAN MEAL:	$4.60 Higher
LIVE CATTLE:	$0.375 Lower
DOW JONES:	220 Points Lower
NASDAQ:	117 Points Lower
CRUDE OIL:	$1.85 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.5 cents to close at $1.3900 with four loads traded. The barrel cheese price remained unchanged at $1.4525 with no loads traded. The dry whey price was unchanged, closing at 86.0 cents with no loads traded, holding out just shy of the record. Class III futures are mixed from 3 cents lower to 20 cents higher. The butter price fell 0.5 cents Monday, closing at $1.270 with 18 loads traded. There were 49 unfilled bids and five uncovered offers remaining. Grade A nonfat dry milk increased 0.25 cents to close at $2.27 with five loads traded. Class IV futures are 38 cents higher on the November contract -- the only contract that has been traded so far. Butter futures are 0.325 to 2.25 cents lower. Dry whey futures are unchanged to 0.25 cents higher. Cheese futures are mixed from 0.2 cents lower to 0.5 cents higher. Nonfat dry milk futures are 0.475 to 3.975 cents higher.