MILK
Class III milk futures were very strong given the movement of underlying cash. A penny move higher in blocks and a 0.50 cent gain in barrels would have equated to a gain of about 15 cents in milk futures. However, short-covering was triggered as traders wanted to get out of positions propelling the market further than it typically would have moved. The increase might be warranted if cheese prices increase again Tuesday. March and April futures have increased nicely over the past week with prices reaching back to the highest level since February and nearly new contract highs. Exports in October were strong with total exports sales reaching 188,182 metric tons, up 16.6% from October 2019. The value of those exports reached $563.3 million, an increase of 6.6%. Year-to-date dairy exports are up 15.9% with the total value of those exports up 11.9%.
AVERAGE CLASS III PRICES
| 3 Month: | $16.12 |
| 6 Month: | $16.57 |
| 9 Month: | $16.78 |
| 12 Month: | $16.91 |
CHEESE
The minor increase of cheese prices sure received a lot of attention by traders as they pushed Class III milk futures higher. The strength certainly was not due to October exports. Cheese exports fell 12.8% compared to October 2019 totaling 24,656 metric tons. This was the largest year-over-year decline in a while. However, year-to-date exports are up 1.5% from the same period in 2019. Dry whey exports were very strong posting an increase of 64.0%, totaling 55,655 metric tons from a year ago. Year-to-date exports are running 23.5% above the same period in 2019.
BUTTER
Butter exports came to life with an increase of 19.0%, reaching 2,479 metric tons. Year-to-date exports are still suffering, running 1.7% below last year. Powder exports are very strong with skim milk/nonfat dry milk powder up 8.6% at 76,782 metric tons. Whole milk powder jumped 79.7%, totaling 3,086 metric tons. Year-to-date skim milk/nonfat dry milk powder is up 22.5% with whole milk powder exports up 5.1%.
OUTSIDE MARKETS SUMMARY
December corn gained 2.50 cents, closing at $4.1950. January soybeans declined 4.50 cents, closing at $11.5850, with December soybean meal down $2.30 per ton, closing at $386.50. December wheat gained 4.75 cents, ending at $5.7125. December live cattle declined $0.87, ending at $108. January crude oil lost $0.50 per barrel, ending at $45.76. The Dow declined 148 points, closing at 30,070, while the NASDAQ gained 56 points, ending at 12,520.
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