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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