MILK
Class III milk futures closed limit up in January through June contracts. This is the first time that I have seen this many contracts in consecutive months close limit up. There will be expanded limits beginning with trading Tuesday evening. Class III futures are expected to jump substantially higher on the open Wednesday and during trading due to a large pool of traders in these contracts. All this volatility is the result of the stimulus bill and the anticipation of strong demand. We know there is $13 billion earmarked for food programs, and there is $400 million for a dairy donation program to pay for milk that is processed and donated to non-profit entities. It will be interesting to see just how this will all work out and how it will ultimately affect the whole milk price situation today.
AVERAGE CLASS III PRICES
| 3 Month: | $16.43 |
| 6 Month: | $17.00 |
| 9 Month: | $17.24 |
| 12 Month: | $17.34 |
CHEESE
USDA released the November Cold Storage report Tuesday, and it was somewhat bearish overall. American cheese in cold storage totaled 760.2 million pounds for the month. American cheese stocks were slightly higher than the previous month by 0.5%, but 2.7% higher than a year ago. It is almost unheard of to see American cheese stocks increase in November. Other natural cheese inventories had changes similar to American cheese. Other natural cheese inventories totaled 564.5 million pounds at the end of November, declining just 0.1% from October but were 1.2% higher from a year ago. Swiss cheese inventories were steady from October at 20.1 million pounds. Swiss cheese inventories fell 17.9% from the year prior. Total cheese in cold storage at the end of November was 1.345 billion pounds. Total cheese in cold storage was 0.3% higher than in October and 1.7% higher than a year ago.
BUTTER
Butter inventories did decline from October in a seasonally expected manner but still maintained a higher-than-average monthly amount compared to the year prior. Butter inventories in cold storage for November totaled 251.8 million pounds, down 16% from October, but 39.4% higher than in November of 2019. This solidifies the idea that butter stocks at the end of the year will be huge.
OUTSIDE MARKETS SUMMARY
March corn gained 3.50 cents, closing at $4.4350. January soybeans gained 4 cents, ending at $12.4725, with January soybean meal up $2.70 per ton at $415. March wheat gained 5.75 cents, closing at $6.17. December live cattle declined $0.27, closing at $110.32. February crude oil fell $0.95 per barrel, closing at $47.02. The Dow lost 201 points, closing at 30,016, while the NASDAQ gained 65 points, closing at 12,808.
