MILK
Class III futures closed on a very strong note Thursday. This was surprising due to cheese prices closing mixed. Traders were bent on pushing futures higher in anticipation of continued strong demand. USDA is not quite as optimistic, as they raised milk production this year by 200 million pounds to an estimated 222.7 billion pounds. Production next year was raised 400 million pounds to a total of 226.3 billion pounds. The reason for the increase was due to strong growth of cow numbers. This is a trend that is not expected to slow down anytime soon. As a result of this, they estimate Class III price for this year $0.35 per cwt lower at an average of $18.20. The big revision is for next year with a decline of $1.65 to an average of $15.60. Class IV price was reduced $0.05 this year to $13.45 and down $0.40 next year to $13.60. The all-milk price was lest unchanged from the previous estimate at $18.25 for this year but reduced $1.10 next year to $16.60.
AVERAGE CLASS III PRICES
| 3 Month: | $16.45 |
| 6 Month: | $16.82 |
| 9 Month: | $16.99 |
| 12 Month: | $17.11 |
CHEESE
Mixed cheese prices Thursday really should not have provided much price direction to the market. However, February through December Class III milk futures made new contract highs Thursday. There is anticipation by the trade that prices may hold near current levels. Support may build the longer prices hold. USDA reduced the average cheese price this year by $0.04 to an average of $1.9250 but dropped their average next year from $1.8250 to $1.6350, a decline of 19 cents per pound. That certainly is cause for concern. Dry whey price was raised 0.50 cent to an average of $0.36 per pound this year and raised $0.04 to $0.4050 for next year.
BUTTER
Estimated butter price was reduced by 0.50 cent per pound to $1.58 this year and dropped 11.50 cents next year to an average of $1.57. Nonfat dry milk was left unchanged at $1.04 this year and increased a penny to $1.0650 per pound for 2021. This will move prices more in line with each other next year, reducing the wild price disparities. However, that is how it looked at the end of last year as well, but it certainly did not turn out that way. There is no way of telling what we will experience next year.
OUTSIDE MARKETS SUMMARY
December corn declined 1.75 cents, ending at $4.2025. January soybeans declined 5.75 cents, closing at $11.5275, with December soybean meal down $3.40 per ton, ending at $381.00. December wheat jumped 13.25 cents, closing at $5.9025. December live cattle gained $0.55, closing at $107.92. January crude oil gained $1.26, closing at $46.78 per barrel. The Dow slipped 70 points, closing at 29,999, while the NASDAQ gained 67 points, ending at 12,406.
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