MILK
Even though cheese prices increased Monday, Class III futures lost much of their exuberance of overnight trading. January took the brunt of it as nearly half of the contract is priced. More stability of underlying cash and a continued choppy market may eliminate some of the extra price premium that had been put into the market. January lost 24 cents, falling back 56 cents from its high. May gained 10 cents with less price fluctuation. The initial reaction last night was similar to what took place a week ago, but not quite as dramatic. The signing of the stimulus bill puts a known influence back into the market. Traders will now turn back to spot trading activity as well as how dairy demand will play out as solicitations for food programs and compensation for fluid milk donations unfold. Milk production continues to slowly increase, providing plenty of milk for bottling and manufacturing, which will allow for more product to be available for increased demand. The prospect for higher milk prices will keep production strong.
AVERAGE CLASS III PRICES
| 3 Month: | $16.62 |
| 6 Month: | $17.06 |
| 9 Month: | $17.16 |
| 12 Month: | $17.21 |
CHEESE
The increase of cheese prices Monday was limited as there were willing sellers meeting the demand of buyers. Both blocks and barrels had 10 loads traded each, which is quite good for a spot trading period. Sellers did not really hold back in anticipation of higher prices as a result of the stimulus bill. It is possible some of the product being sold could have been nearing the 30-day-old mark, and sellers wanted to move it to the market before it was ineligible to trade on the daily spot market. The fact that prices were able to close higher did provide hope that a floor has been set and this may be the lowest it gets.
BUTTER
Some plants were closed for a few days over Christmas, which put more cream out to the spot market at reduced prices. Plants are running again utilizing heavy cream supply and moving finished product to the market as quickly as possible. Retail demand has slowed with most outlets waiting to see the movement of butter over the next week before placing additional orders.
OUTSIDE MARKETS SUMMARY
March corn gained 5.50 cents, closing at $4.5650. January soybeans declined 8.25 cents, closing at $12.5525, with January soybean meal down $1.50 per ton, closing at $415.30. March wheat fell 12.75 cents, closing at $6.1425. December live cattle gained $0.90, closing at $113.05. February crude oil declined $0.61, closing at $47.62 per barrel. The Dow gained 204 points, closing at 30,404, while the NASDAQ gained 95 points, ending at 12,899.
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