MILK
The pressure is on closer-month Class III futures due to continued weakness of cheese. Later contracts were steady to higher anticipating an increase of demand. USDA announced the Federal Order class prices for the month of October. Class II was $13.86, an increase of $0.23 from September, but down $2.99 from a year ago. Class III price was $23.34, an increase of $1.73 from September and up $2.89 from October 2019. Class IV price was $13.30, down $0.17 from September and down $3.30 from a year earlier. The trade anticipated a price 7 cents lower for Class III and 11 cents higher for Class IV. The Global Dairy Trade auction was held Tuesday with the trade-weighted average up 4.3% from the previous event. Anhydrous milk fat gained 2.6% to $4,278 per metric ton or $1.94 per pound. Butter increased 3.8% to $3,986 per metric ton or $1.81 per pound. Buttermilk powder increased 1.3% to $2,731 per metric ton or $1.24 per pound. Cheddar cheese price increased 2.4% to $3,734 per metric ton or $1.69 per pound. Lactose jumped 13.5% to $1.004 per metric ton or $0.46 per pound. Skim milk powder gained 3.6% to $2,889 per metric ton or $1.41 per pound. Whole milk powder gained 5% to $3,182 per metric ton or $1.44 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $15.69 |
| 6 Month: | $16,17 |
| 9 Month: | $16.44 |
| 12 Month: | $16.61 |
CHEESE
Spot milk supply is plentiful in many areas with much of it available at large discounted prices. Cheese plants indicated orders for cheese has been variable and slipping due to more restrictions being put on food service businesses. There is a strong potential for a COVID-19 vaccine to be made available by the end of the year, but the distribution and impact may take some time to be realized. Most consumers are becoming more accustomed to meals at home as well as curbside pickup. It may take some time before that habit swings back around to where it has been prior to the virus.
BUTTER
Demand has been strong with supply moving briskly to retail outlets. Government orders have slowed, and much of the supply for the Food Box program may have already been purchased. The newest round of further restrictions or restaurant closures will have some impact on overall food service demand. Butter production is heavier due to plentiful cream supply and plentiful milk.
OUTSIDE MARKETS SUMMARY
December corn gained 4.25 cents, closing at $4.19. January soybeans fell 9 cents, closing at $11.53, with December soybean meal down $4 per ton, closing at $389.50. December wheat jumped 12.50 cents, ending at $5.78. December live cattle increased $0.07, closing at $110.70. January crude oil gained $0.73, closing at $45.28 per barrel. The Dow gained 60 points, closing at 29,884, while the NASDAQ declined 6 points, ending at 12,349.
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