Thursday, December 3, 2020

Thursday Closing Dairy Market Update - Total Cheese Production Declined

 MILK

Class III milk futures put in a strong day with contracts through May, posting double-digit gains. Higher cheese prices triggered short-covering as traders wanted to bank whatever profits they might have had in case cheese prices increase for a few days. Fluid milk demand through retail channels continues to remain strong as consumers are purchasing for use at home. Demand for fluid for the food service industry has declined significantly this year with no real idea as to when that might change. Movement through one channel or the other is great as long as it keeps from backing up into the market. More spot milk is available to manufacturers as milk receipts continue to increase.

AVERAGE CLASS III PRICES

3 Month:$15.99
6 Month:$16.40
9 Month:$16.60
12 Month:$16.74


CHEESE

Total cheese production in the month of October was 1.13 billion pounds. This was 0.6% less than October 2019, according to the Dairy Products report released Thursday. Italian-type cheese output totaled 469 million pounds, down 3.4% from a year ago. Declines in both categories was a bit surprising due to increased milk production. However, the opposite was true for American cheese production. Output totaled 461 million pounds, which was 3.5% above October 2019 and 6.1% above September. Dry whey production totaled 80.2 million pounds, down 11.8% from a year ago.

BUTTER

Butter production reached 165 million pounds. This was 1.2% higher than a year ago and was 8.8% above September. Of course, there was an extra day of production in October compared to September. Nonfat dry milk output totaled 138 million pounds, up 4.3% from a year ago. Skim milk powder totaled 57.2 million pounds, up 20.7%.

OUTSIDE MARKETS SUMMARY

December corn gained 3.50 cents, closing at $4.2250. January soybeans jumped 15.25 cents, closing at $11.6825, with December soybean meal up $3.30 per ton, closing at $392.80. December wheat declined 6.25 cents, ending at $5.7175. December live cattle fell $1.10, ending at $109.60. January crude oil gained $0.36, closing at $45.64 per barrel. The Dow gained 86 points, ending at 29,970, while the NASDAQ gained 28 points, ending at 12,377.



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