MILK
USDA made an announcement that it would purchase $60 million of fluid milk and $50 million of butter for various food nutrition assistance programs. There has been some thought that this was new buying similar to the Farm to Families Food Box program. However, this was just an announcement for usual purchases made to assistance programs. USDA makes purchases like this every month. The bottom line is this has likely not been the driver of higher prices. Every purchase of dairy products does fit into the big picture, and every area of demand is necessary for keeping prices supported to some extent. This is similar to weekly export sales in the grain markets. Class III milk futures closed steady to lower with only front-month December posting an increase of 16 cents. December will continue to follow underlying cash closely over the next week until it will be mostly priced, except for adjustments that will be made based on the weekly AMS prices.
AVERAGE CLASS III PRICES
| 3 Month: | $16.12 |
| 6 Month: | $16.52 |
| 9 Month: | $16.72 |
| 12 Month: | $16.87 |
CHEESE
The inability of block price to hold at the higher level Tuesday did send a ripple of negativity through the market. Sellers were willing to offer product more aggressively, pushing the market from the high. This really does not mean much as price movement Wednesday may be completely different as business is being done each day. More loads were traded, which indicates good demand and a willingness of both buyers and sellers are current prices. Prices may move within a sideways range for a period as the market moves according to supply and demand.
BUTTER
Price continues to push higher trading right in the middle of the range between block and barrel cheese. It is unclear as to whether November and December demand will be able to draw down inventory sufficiently in order to bring it in line with a year ago. This is unlikely, but the recent price increase certainly has been a welcome sight. This has been able to provide a boost to Class IV futures.
OUTSIDE MARKETS SUMMARY
December corn declined 2.50 cents, ending at $4.17. January soybeans fell 12.75 cents, ending at $11.4575, with December soybean meal down $4.80 per ton, closing at $381.70. December wheat declined 7.50 cents, closing at $5.6375. December live cattle slipped $0.15, ending at $107.85. January crude oil declined $0.16, closing at $45.60 per barrel. The Dow gained 104 points, ending at 30,174, while the NASDAQ gained 63 points, ending at 12,583.
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