Monday Closing Dairy Market Update - October Income Over Feed: $11.13

 MILK

Cheese prices retreated Monday, but Class III milk futures held up well except for December and January contracts. December is trying to anticipate the level of the average prices for the month. About half of the contract is already priced, still leaving it open to significant price fluctuation, but the swing potential will be a little less each day over the next two weeks. USDA released the October Agricultural Prices on Monday, showing the income over feed price moving to $11.13, an increase of $1.71 over September. Obviously, this amounts to no payments under the Dairy Margin Coverage program. The average corn price was $3.61, an increase of $0.21 over September. The central Illinois soybean meal price jumped to $367.11 per ton, up $47.12 per ton from September. The average alfalfa hay price was $171 per ton, unchanged from the previous month. The premium/supreme hay price was $194, up $2 per ton from September. This puts the average alfalfa hay price for these two categories at $182.50 per ton. The all-milk price for October was $20.20, an increase of $2.30 per cwt from September. The large jump in the all-milk price more than offset the increase of feed prices, making it the second-highest income over feed price for the year.

AVERAGE CLASS III PRICES

3 Month:	$18.11
6 Month:	$17.26
9 Month:	$17.09
12 Month:	$17.08

CHEESE

Cheese prices retreated Monday and may retreat further as weakness will again keep buyers on the defensive waiting for lower prices to pick up supplies. There is little concern over a tight market in the foreseeable future, leaving buyers purchasing on an as-needed basis. This will continue through the end of the year, which will result in price bounces, but little chance of a change in trend. More cheese might be offered to spot market in the coming days due to more cheese production over the past week as more milk was available.

BUTTER

The strength of price is likely near the end again with sellers likely to take advantage of the higher prices in order to move product. Buyers are willing to purchase to fill strong retail orders. Supply is plentiful, eliminating any concern over supply. Purchasing will continue on an as-needed basis. The trend remains sideways to lower.

OUTSIDE MARKETS SUMMARY

December corn declined 5.75 cents, ending at $4.1975. January soybeans fell 23.25 cents, closing at $11.6850, with December soybean meal down $5.40 per ton, closing at $393.10. December wheat fell 16.25 cents, closing at $5.8025. December live cattle declined $0.45, ending at $110.17. January crude oil declined $0.19, closing at $45.34 per barrel. The Dow lost 272 points, closing at 29,639, while the NASDAQ slipped 7 points, ending at 12,199.

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Monday Midday Dairy Market Summary - Cheese Prices Slip Back

 Midday Market Update:

Block cheese price declined 2 cents closing at $1.66 with 2 loads traded. Barrel cheese price slipped 0.75 cent closing at $1.4150 with no loads traded. This did not put a large amount of pressure on Class III futures than what they were showing prior to spot trading. Futures rebounded somewhat from the level reached during spot trading limiting some of the initial losses. Class III futures are 19 cents lower to 16 cents higher. Front-month November shows the greatest gain as it adjusts to the weekly AMS prices from last week. Butter price gained 0.25 cent ending at $1.3625 with 11 loads traded. Grade A nonfat dry milk price increased 1.50 cents ending at $1.11 with 3 loads traded. Dry whey price remained unchanged at 43 cents with no loads traded. Class IV futures are 7 cents higher. Butter futures are 0.47 cent lower to 2.07 cents higher. Dry whey futures are 0.57 cent to 0.73 cent higher. USDA will release the October Agricultural Price report this afternoon providing prices used to calculate income over feed for the Dairy Margin Coverage program.

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Monday Morning Dairy Market Update - Markets Poised for Higher Open

 Opening Calls:

Class III Milk Futures:	4 to 10 Higher
Class IV Milk Futures:	Steady to 5 Higher
Butter Futures:	1 to 2 Higher

Outside Market Opening Calls:

Corn Futures:	Mixed
Soybean Futures:	6 to 9 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	4 to 8 Lower

Milk:

The holiday-shortened week has cheese prices moving higher. The test will come this week as to whether the strength is real or just a temporary bounce. Fundamentals have not changed much, but prices seemed to have fallen to a level that is attractive for buyers to not only fill orders but begin rebuilding aging programs. More milk was available for manufacturing last week, which increased dairy product output. Some of the spot milk available carried a double-digit discount. This may not bode well for later December as the holidays approach. USDA will release the October Agricultural Prices report Monday proving prices used in the calculation of income over feed. There is a good possibility there will be another payment under the Dairy Margin Coverage program for those who chose the $9.50 level.

Cheese:

Cheese prices showed increases last week, but due to it only being a three-day week, it was unclear as to the extent of the strength. Barrels only gained back what they lost showing no change from the end of the previous week. The only real strength was in blocks as buyers needed to fill orders. Cheese production increased last week as more milk was available. Some plants were not in the market to purchase any extra milk due to the plant already at full capacity. The price increase may be temporary.

Butter:

There is no change in the butter market. Price may continue to slowly grind lower as the end of the year approaches. Inventory is declining as well as building. They are declining from month to month but building in comparison to the previous year. Inventory is on track to end the year substantially higher than the previous year. The return of demand from the food service industry will be a slow process even with a vaccine.

#completedairyprogram

Thursday Closing Dairy Market Summary - Milk Futures Slip Lower This Week

 MILK

Class III milk futures could not gain any traction this week even though cheese and butter prices were higher. Contracts through May closed lower for the holiday-shortened week. Traders were not convinced underlying cash prices were going to maintain price strength for any duration of time. During the holiday periods, there are plentiful milk supplies available with discount spot milk very attractive for those who have the capacity for processing it. Dairy Market News reports that Central region cheese makers are receiving calls to take extra milk with some offers at double-digit discounts. They did not indicate any range of prices, but that sellers are aggressive at offering milk. It was anticipated there would be price discounts, but to this extent is more than expected. Overall milk production is increasing seasonally, providing plentiful supplies across the country. This is likely what is keeping traders from buying milk futures as current fundamentals are not supportive to stronger prices and a change in trend. Dairy futures and options will not be open for trading on Friday with no spot markets trading. Other futures market will be trading for a shorter time period than usual.

AVERAGE CLASS III PRICES

3 Month:	$18.15
6 Month:	$17.28
9 Month:	$17.11
12 Month:	$17.08

CHEESE

Cheese prices were finally able to post a positive week. However, the result might have been different if it would have traded the rest of the week. Block price increased 3.50 cents with two loads traded. Barrel price remained unchanged with 22 loads traded. Dry whey price declined 0.75 cent with one load traded. Prices may have found a level at which business will be done for the time being, leaving the market in a sideways price pattern. More cheese will be manufactured this week as milk is diverted from school accounts. Retail demand is showing an increase, but this is not offsetting the reduction from the food service industry.

BUTTER

For the week, butter increased 1.50 cents with 73 loads traded. This is incredible that that much volume has traded over the past three days. It is almost as if business needed to be done due to the fact that it was a holiday-shortened week. Grade A nonfat dry milk increased a penny with 23 loads traded.

OUTSIDE MARKETS SUMMARY

December corn declined 5.75 cents, closing at $4.20. January soybeans lost 7.25 cents, closing at $11.84, with December soybean meal down $1.40 per ton, closing at $396.90. December wheat fell 23 cents, ending at $5.8825. December live cattle gained $0.20, closing at $111.37. January crude oil gained $0.80, closing at $45.71 per barrel. The Dow declined 174 points, ending at 29,872, while the NASDAQ gained 58 points, closing at 12,094.

#completedairyprogram

Wednesday Midday Dairy Market Summary - Butter Price Gains in Heavy Trade

 MIDDAY MARKET UPDATE:

Block cheese price remained unchanged at $1.68 with no loads traded. Barrel cheese price gained 2.25 cents, closing at $1.4225 with 5 loads traded. There were 4 unfilled bids remaining at the close. Traders did not view this as bullish as Class III futures are unchanged to 23 cents lower. Futures have actually weakened since spot trading with no supporting influence coming from the rise of butter price. Butter gained 5 cents, closing at $1.36 with 44 loads traded. It was a somewhat surprising price increase with that amount of loads available to the market. There were 6 unfilled bids remaining under the market and one uncovered offer above the market at the close. Grade A nonfat dry milk increased 0.75 cent, closing at $1.0950 with 11 loads traded. Dry whey price remained unchanged at 43 cents with no loads traded. Class IV futures are 7 cents higher. Butter futures are 1.05 cents lower to 0.97 cent higher. Dry whey futures are steady to 0.25 cent higher. Wednesday is the last trading day for the week for the dairy complex.

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Fluid Milk and Cream - Western U.S. Report 48

Lower temperatures are supporting the increase of milk production in California. Milk     testing shows improvements in the level of fat/protein components, also showing stable     somatic cell count (SCC). Class I sales are reported as lightly down during this shortened     holiday week. The volumes of raw milk are ample, but some processing facilities will remain     open during Thanksgiving and have enough capacity to handle most of the milk. 

Milk production in Arizona is generally even compared to last week. Most Class I and Class II     demands for the holiday have now been filled. Some processors are just taking care of a few     last-minute order deliveries. Some manufacturers are running full production schedules at     some facilities, while others plan to slow down for the Thanksgiving holiday. 

Farm milk production in New Mexico is slightly up. Class II manufacturers have eased back on demand for milk loads over the Thanksgiving holiday. Balancing plants are expected to run at full capacity through the week, helping to clear large amounts of milk. 

Milk production in the Pacific Northwest is steady. Going into the holiday week, milk handlers noted an increase in retail bottled milk demand. Industry contacts hope this increase can help balance out milk intakes over the holiday week. Manufacturers have plenty of milk needed for processing. Cream supplies are heavy. 

In the mountain states of Idaho, Utah and Colorado milk production is heavy. Most processing facilities are at or near full capacity. Extra spot loads are common. Industry contacts confirm some spot milk prices are $4 under Class IV in Idaho. 

The volumes of condensed skim milk are abundant in the West. Drying schedules are continuous and expected to be very active by the end of the week. Cream spot sales are down due to most     holiday orders being fulfilled. The number of cream offers is slowly increasing. While some     Class II manufacturing facilities will shut their doors at least on Thanksgiving Day, butter     churners are anticipated to remain actively clearing cream loads. Premiums for western cream     are steady to slightly down this week.


     Western U.S., F.O.B. Cream
     Multiples Range - All Classes:               1.0500 - 1.2400

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Wednesday Morning Dairy Market Update - Quiet Overnight Markets

 Opening Calls:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

Outside Market Opening Calls:

Corn Futures:	1 to 3 Lower
Soybean Futures:	Mixed
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	Mixed

Milk:

Dairy markets were quiet overnight. Traders are uncertain what underlying cash price will do Wednesday. According to the current offers in Class III futures, it appears the market might be a little weaker. However, once more traders look at the market and even up some of their positions prior to the extended weekend, prices will be influenced by underlying cash. Weather has been good for cow comfort in most areas, keeping milk production slowly increasing. More milk is available for manufacturing, increasing the offers in the spot market. Discounts will likely be significant as many plants are running near capacity and with declining prices, they may not be interested in purchasing discounted milk on the spot market. Wednesday is the last trading day in the dairy complex for the week. Dairy markets will be closed both Thursday and Friday.

Cheese:

It is difficult to know whether cheese has found a bottom at current levels or if the recent strength was only due to orders needing to be filled. As soon as there was more aggressive buyer interest, sellers held back for higher prices. Once those immediate orders are filled, prices may slip back again. Time of year is not conducive for an extended price trend higher.

Butter:

There is little expectation for price movement Wednesday. The heavy volume of sellers on the spot market indicates the desire remains for moving product as quickly as possible to manage a growing inventory. Some plants may be closed for the holiday period while others will run on full schedules utilizing the abundance of cream that is available.

#completedairyprogram

Tuesday Closing Dairy Market Update - Milk Futures Fail Close Higher

 MILK

December Class III futures made a new low Tuesday since the high set in October. Traders are trying to anticipate how low cheese prices may move before the December contract is priced. The higher block price over the past two days and a steady barrel price Tuesday is increasing the anxiousness of traders over whether the market might have found a bottom. However, this is not triggering aggressive buying at this point as fundamentals do not support any sustained increase of prices. More milk will be available to the market over the rest of the week as bottling demand slows with some plants closing for the holiday. More spot milk will be available at lower prices in order to entice manufacturing plants to purchase extra supply. One problem is that many plants are running near capacity already and may not be overly willing to purchase extra supply. This could deepen the discount of spot milk.

AVERAGE CLASS III PRICES

3 Month:	$18.36
6 Month:	$17.40
9 Month:	$17.19
12 Month:	$17.15

CHEESE

The trend in cheese is still down. The bounce of the past two days in blocks has not changed the overall market direction. It certainly has been positive to see some buying interest with limited seller interest. However, it is likely just a flash in the pan. It would be positive to see the market move sideways for a period rather than the relentless decline we have experienced the past few weeks. Buyers are purchasing to fill orders as they come in and not purchasing in anticipation of demand. Some aging programs are being replenished due to lower prices.

BUTTER

Butter continues to slowly grind lower. Price will eventually reach a level at which buyers may take a stand, as it is attractive to purchase even if it needs to be stored for a while. It will reach a level where there will be limited downside risk. More cream will be available the rest of this week keeping churns busy and plenty of fresh product available.

OUTSIDE MARKETS SUMMARY

December corn slipped 0.75 cent, ending at $4.2575. January soybeans slipped 0.25 cent, ending at $11.9125, with December soybean meal up $3.40 per ton, closing at $398.30. December wheat jumped 12.50 cents, ending at $6.1125. December live cattle jumped $111.17. January crude oil gained $1.85, closing at $44.91 per barrel. The Dow jumped 455 points, closing above 30,000 for the first time. The NASDAQ gained 156 points, ending at 12,037.

#completecalfcare

October milk production up 2.3%

 Milk is flowing profusely on U.S. farms. Preliminary data in the USDA’s October Milk Production report has output at 18.56 billion pounds, up 2.3% from October 2019, with output in the top 24 producing states at 17.7 billion pounds, up 2.5%.

Revisions lowered the September 50-state and 24-State totals 5 million pounds, putting the 50-States at 18.0 billion pounds, still up 2.3% from September 2019.

October cow numbers totaled 9.39 million head in the 50 states, up 14,000 from September and 43,000 above a year ago. The September total was revised up 10,000 head.

October’s output per cow averaged 1,977 pounds, up 37 pounds from a year ago or 1.9%.

California was up 1.2% from a year ago, thanks to a 30-pound gain per cow offsetting 5,000 fewer cows milked. September output was revised down 34 million pounds, up 2.2% from September 2019, instead of the 3.2% gain originally reported.

Wisconsin was up 1.7% in October, on a 50-pound gain per cow offsetting 9,000 fewer cows.

Idaho was up 2.7%, thanks to 14,000 more cows and 10 pounds more per cow.

Michigan was up 3%, on a 50-pound gain per cow and 3,000 more cows. Minnesota was up 2.5%, on a 60-pound gain per cow offsetting 3,000 less cows. New Mexico was up 1.9%, on a 25-pound gain per cow and 2,000 more cows.

New York was up 1.0%, thanks to a 20-pound gain per cow. Cow numbers were unchanged.

Oregon was down 2.3% on 2,000 fewer cows and a 10-pound loss per cow.

Pennsylvania was up 2.5%, on a 55-pound gain per cow offsetting a loss of 3,000 cows from a year ago.

South Dakota saw the biggest gain, up 12.9%, on 13,000 more cows and 45 more pounds per cow. Texas was up 8.2% on 28,000 more cows and a 65-pound gain per cow.

Washington state was off 0.5% on 2,000 fewer cows, though output per cow was up 5 pounds. Most analysts view the report as bearish to the market.

Culling below 2019

Dairy cow culling crept higher in October, according to the latest Livestock Slaughter report, but was below a year ago. An estimated 258,900 head were sent to slaughter under federal inspection, up 8,500 head or 3.4% from September but 27,200 or 9.5% below October 2019.

A total of 2.56 million head have been culled in the first 10 months of 2020, down 142,100 head or 5.3% from the same period in 2019.

In the week ending Nov. 11, 57,800 dairy cows were sent to slaughter, same as the week before but 4,900 head or 7.8% below that week a year ago.

Huge butter stocks

Butter stocks tumbled in October but remain well above year ago levels. The Agriculture Department’s latest Cold Storage report has the Oct. 31 butter inventory at 300.9 million pounds, down 43.7 million pounds or 12.7% from September, but a still burdensome 65.8 million pounds or 28.0% above October 2019, 16th consecutive month they topped the year ago level.

American type cheese fell to 753.9 million pounds, down 18.4 million pounds or 2.4% from September, but were 10.3 million pounds or 1.4% above a year ago.

The “other” cheese inventory crept to 564.4 million pounds, up 1.7 million pounds or 0.3% from September, but 7.6 million pounds or 1.3% below a year ago.

The total cheese inventory fell to 1.34 billion pounds, down 17.3 million pounds or 1.3% from September, and 3.2 million pounds or 0.2% below October 2019.

Cheese rallies

CME block Cheddar dropped to $1.5975 per pound by Thursday last week, lowest since Aug. 11, but regained 4.75 cents Friday, first gain since Oct. 31, and closed at $1.6450, still down 27.25 cents on the week and 19.75 cents below a year ago. They had plunged $1.1375 in the past three weeks.

The barrels plunged 21 cents last Monday, falling to $1.40, lowest since Aug. 24, but also pushed higher Friday, closing at $1.4225, 18.75 cents lower on the week, and 76.25 cents below a year ago. The barrels lost $1.1075 in three weeks. Seven cars of block were sold last week at the CME and 13 of barrel.

The blocks added 1.50 cents Monday on a trade, as traders anticipated the afternoon’s Cold Storage data, and gained 2 cents Tuesday on a trade, hitting $1.68.

The barrels gave back the 2.25 cents they gained Friday and stayed put Tuesday at $1.40, with 10 cars unloaded on the day, 28 cents below the blocks.

Midwest cheese producers continue to report COVID-related staffing concerns, reports Dairy Market News, though production is running steadily. Milk availability is growing and cheesemakers are reporting notably lower spot milk prices. There was some interest on the cheese buyer side this week, as customers are returning in light of the price declines, but most reports continue to point to buyer hesitancy.

There is concern about more public restrictions due to the pandemic, plus cheese customers do not want extra inventory at the end of the year, says DMN.

Western cheese buyers are seeing more offers for cheese as prices sink. Contacts think markets shifted from active demand to oversupply in a relatively short amount of time and manufacturers and brokers are trying to clear stocks so they don’t lose value. Buyers are not interested unless prices are at lower levels. The challenge for both buyers and sellers is that demand for cheese is lagging. Retail demand is ahead of last year but foodservice sales are weak, government purchases are less than previous rounds, and higher prices have stagnated export opportunities.

Spot butter saw a Friday finish at $1.3450 per pound, down 5.50 cents on the week and 68 cents below a year ago, with 21 cars trading hands on the week.

Monday’s butter backed down another 2.75 cents, with 26 carloads exchanging hands, and lost 0.75 cents Tuesday, dipping to $1.31, lowest CME price since May 8.

Central butter producers report mixed tones on cream availability. Some say offers were generally quiet, others are still receiving cream if they choose to take it. Expectations are pointing to more cream becoming available into early 2021. Food service is not expected to be where it has been in previous years. Retail buying increases have helped allay some of the foodservice loss, but market prices are and have been strained in 2020 compared to previous years.

Cream supplies have been adequate for steady butter production in the West. A surge is anticipated Thanksgiving week as some operations take time off. Orders remain strong for most print accounts as prices edge lower. Recent lockdowns, due to advancing pandemic concerns, are stimulating retail sales. Manufacturers continue to pull heavily on stored butter to meet the strong year-end orders.

Grade A nonfat dry milk closed Friday at $1.0850 per pound, down a quarter-cent on the week and 13.50 cents below a year ago, with 29 sales reported last week.

The powder was off 0.25 cents Monday but crept back up 0.50 cents Tuesday, to $1.0875, with 11 cars sold on the day.

Dry whey fell to 42 cents per pound last Wednesday but closed Friday at 43.75 cents, up 0.75 cents on the week and 9 cents above a year ago on 2 sales for the week.

The whey was unchanged Monday but backed down 0.75 cents Tuesday, to 43 cents per pound.

Class I up $1.83

The Agriculture Department announced the December Federal order Class I base milk price at $19.87 per hundredweight, up $1.83 from November, the highest Class I price since December 2014, and 54 cents above December 2019. That put the 2020 Class I average at $16.91, down from $16.99 in 2019 and compares to $14.84 in 2018.

#completedairyprogram

From: Capital Press

Tuesday Midday Dairy Market Summary - Cheese Prices Hold

 MIDDAY MARKET UPDATE:

Block cheese price continued to slowly rise during spot trading, eventually gaining 2 cents and closing at $1.68 with 1 load traded. There were no unfilled bids or uncovered offers remaining at the close. Barrels were on a roller coaster with price initially declining 1.50 cents before moving to 0.50 cent higher and finally settling unchanged at $1.40 with 10 loads traded. There were 2 unfilled bids remaining below the market at the close. Initially this did not change Class III futures from the level they were prior to spot trading. However, since then some of the losses have been trimmed with December posting a gain of 12 cents. Contracts are mixed from 9 cents lower to 12 cents higher. Butter price slipped 0.75 cent, closing at $1.31 with 3 loads traded. Price is back to the lowest level since May 8. Grade A nonfat dry milk price increased 0.50 cent, closing at $1.0875 with 11 loads traded. Dry whey price declined 0.75 cent, ending at 43 cents with 1 load traded. Class IV futures are 6 cents higher. Butter futures are 1.00 to 3.10 cents lower. Dry whey futures are 0.40 to 0.90 cent higher.

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Tuesday Morning Dairy Market Update - Lower Prices Expected

 Opening Calls:

Class III Milk Futures:	3 to 5 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	1 to 2 Lower

Outside Market Opening Calls:

Corn Futures:	6 to 9 Lower
Soybean Futures:	10 to 15 Lower
Soybean Meal Futures:	$1 to $3 Lower
Wheat Futures:	3 to 7 Lower

Milk:

Increasing milk production and the potential for plant quotas earlier is becoming a reality earlier than usual. The information that Land O' Lakes will be enforcing base milk production for December and possibly longer is now on the table. It is likely they will leave this in place through a portion of next year as demand generally slows through the first half of the year during which time milk production generally increases. Others may follow suit as 2021 unfolds. There have been good results over some vaccines for COVID-19, but it will take time to get this distributed and improve the confidence of consumers that it is safe to return to a more social lifestyle. For right now, there will be little change in consumption patterns in the near term. Milk futures may come under further pressure.

Cheese:

The increase of blocks Monday should be viewed as a bounce. Buyers needed to pick up some cheese and had to bid up due to no offers being made available. A higher price might bring sellers back in again to take advantage of the bounce. There is little fundamental reason for prices to trend higher for any extended period of time.

Butter:

Even though butter inventory declined during the month of October, inventory is building relative to a year ago. September butter stocks were 18% above a year ago after the decline of stocks that month. Stocks declined in October with inventory now 28% above a year ago. It indicates movement is good, but production is higher than demand. That is not a good combination for extended price strength anytime soon.

#completedairyprogram

Monday Closing Dairy Market Update - Cheese and Butter Inventory Declined

 MILK

The rebound of Class III futures was short-lived with the weakness Monday nearly eliminating the gains on Friday. Barrel cheese could not hold the gain, falling back again Monday. This more than offset the gain of blocks. Milk production is slowly increasing, outpacing last year. This could oversupply the market rather quickly once holiday purchasing is finished. For now, demand is strong but not enough to support prices at higher levels. There will be a huge price decline from November to December with a current discount of $7.50 per cwt. This will be a very difficult milk check to see. The decline from August to September was hard with that being down $3.34. This will be nearly double that loss. Front-month November is basically set with some possible minor price adjustments. December is being priced but is wide open for price movement based on underlying cash. Land O'Lakes will be enforcing base milk production for the month of December and possibly longer.

AVERAGE CLASS III PRICES

3 Month:	$18.41
6 Month:	$17.45
9 Month:	$17.23
12 Month:	$17.18

CHEESE

USDA released the October Cold Storage report Monday. It mostly showed a seasonal decline of inventory except for the other cheese category. Other cheese inventory increased 1.7 million pounds, totaling 564.4 million pounds. This is 1% below a year ago. It is unusual for cheese stocks to increase at this time of year. American cheese inventory declined 18.5 million pounds, totaling 753.9 million pounds. Stocks are 1% above a year ago. Italian cheese stocks totaled 20.2 million pounds, down 549,000 pounds from a year ago. Current stocks are 23% below October 2019. Total cheese inventory declined 17.3%, totaling 1.339 billion pounds and very close to a year ago. This is neutral to the market.

BUTTER

Butter inventory declined significantly and a little more than expected. Stocks were down 43.6 million pounds, totaling 300.3 million pounds. This was positive to the market. Although stocks declined significantly, they are running 28% above a year ago. That is the bearish aspect of the market. It is certain that inventory will end the year substantially higher than it did a year ago.

#completedairyprogram

Monday Midday Dairy Market Summary - Butter Continues to Decline

 Midday Market Update:

Block cheese price increased 1.50 cents closing at $1.66 with one load traded. Barrel cheese price declined 2.25 cents ending at $1.40 with 7 loads traded. The weakness of barrels more than offset the gain of blocks resulting in Class III futures falling back. Contracts range from 3-26 cents lower. Butter price declined 2.75 cents closing at $1.3175 with 26 loads traded. This is surprising as sellers continue to remain aggressive moving butter at lower prices to reduce supply. Grade A nonfat dry milk price slipped 0.25 cent closing at $1.0825 with one load traded. Dry whey price remained unchanged at 43.75 cents. Class IV futures are 13 cents to 27 cents lower. Butter futures are 1.02 cents lower to 1.57 cents higher. Dry whey futures are 0.22 cent lower to 0.10 cent higher. The October Cold Storage report will be released Monday, which should show a decrease of inventory in all categories. However, some categories may show less of a decline than usual.

#completecalfcare

Monday Morning Dairy Market Update - Cautious Start to the Week

 Opening Calls:

Class III Milk Futures:	Steady to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Lower

Outside Market Opening Calls:

Corn Futures:	4 to 6 Higher
Soybean Futures:	10 to 15 Higher
Soybean Meal Futures:	$3 to $4 Higher
Wheat Futures:	3 to 6 Higher

Milk:

Milk futures made a nice bounce on Friday in response to higher cheese prices. The market did not show any real follow-through overnight as traders wonder if price support has been uncovered or if the increase of prices will just be temporary. It is a short trading week for dairy with trading taking place Monday through Wednesday. Most markets will be close on Thursday for Thanksgiving. The dairy complex will be closed on Friday even though all other markets will be open for a shorter day. This should not have any real impact on the market as cash business will need to be done and a shorter trading week will have no influence on this. Class III futures from December through the whole of next year shows a more normal market. Class IV futures continue to show strength through the year. That will likely change substantially as we move through next year. The impact of COVID-19 and rising milk production will be felt for a good portion of the year.

Cheese:

The bounce of cheese prices Friday was certainly good to see. The duration of this bounce is unclear. Buyers of cheese have stepped back not specifically because sellers were aggressive, but also because demand has slowed due to much of the holiday purchases having been completed. Strong demand remains as buyers continue to purchase on an as-needed basis. Aging programs may begin to be replenished at these lower prices.

Butter:

It appears butter prices might be heading lower. Other than the large price increase from late April to June, the market has been grinding lower since July 2019. COVID-19 created a period of substantial volatility, but it did not change the trend that began last year. Further weakness might be seen as more restrictions are being put on public gatherings with some places of business being shut down again for a few weeks. This does not provide any support for increased demand. USDA will release the October Cold Storage report Monday. Inventory is expected to show a decline, but that decline of butter might be less than usual for this time of year.

#completedairyprogram

Friday Closing Dairy Market Update - Strength in the Midst of Weakness

 Milk:

Milk production is seasonally increasing, running significantly higher than a year ago. Heavier milk supplies will be available for manufacturing next week as schools that have remained open will be closing for a few days. Some schools may not reopen again before the end of the year due to the spike in COVID cases. This seems to be something that will be a continued struggle throughout the rest of the school year. Class III milk futures have fallen throughout the week with December down $1.73 from a week ago, closing slightly below $16.00. New lows were made Friday before prices spiked back up after more aggressive buying interest was uncovered in spot cheese. Cheese production remains strong as increasing milk receipts come to the plants. Demand for fresh cheese has slowed a bit which has made a big difference in the market. The market has switched quickly from supplies being deficit to now overabundant. More milk will be available for manufacturing next week as bottling will slow due to schools being closed. Spot milk prices are expected to decline as extra milk needs to find a home. The market will only trade the first three days of next week. Dairy markets will be closed on Friday even through other markets will be open.

Average Class III Prices:

3 Month:	$18.59
6 Month:	$17.59
9 Month:	$17.33
12 Month:	$17.25

Cheese:

Dairy Market News reports cheese inventories are increasing in the Northeast. Overall, inventory should be decreasing as should be seen on the October Cold Storage report that will be released on Monday. The key will be how much it has declined. Bear in mind the report from Dairy Market News is in reference to this past week and we are in November. The dynamic of supply and demand has been changing in the market over the past few weeks with the possibility of November showing inventory gains. For the week, blocks have fallen 27.25 cents with 7 loads traded. Barrels have fallen 18.75 cents with 13 loads traded. This was a lot less than last week, but still rather significant. Dry whey increased 0.75 cent with 2 loads traded.

Butter:

Churning is active due to significant cream supply. More cream is expected to be available over the next week as some processing operations close for the Thanksgiving holiday. Inventory is being used to supplement fresh production in order to meet strong retail demand. However, inventory may not be declining as much as usual due to slowed demand from the food service industry. For the week, butter declined 5.50 cents with 21 loads traded. Grade A nonfat dry milk slipped 0.25 cent with 29 loads traded.

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