MILK
The bias for milk prices is bearish. So much so that even steady cash prices are considered negative. Milk production has been higher than expected this summer despite some adverse weather events. So, even with declining milk output, production continues to remain above year-ago levels. USDA estimates milk production a little lower for this year and next year, according to the World Agricultural Supply and Demand Estimates (WASDE) report released Thursday. Total milk production this year was reduced 100 million pounds from July to 228.1 billion pounds. Milk production next year was reduced 400 million pounds to a total of 231.2 billion pounds. Ending stocks on a fats basis were raised 800 million pounds from their previous estimate, bringing ending stocks to 16.0 billion pounds this year and raising it 300 million pounds to 15.5 billion pounds for next year. On a skim-solids basis, ending stocks were raised 100 million pounds to a total of 11.2 billion pounds. Next year, ending stocks were raised 300 million pounds, reaching 11.4 billion pounds. USDA reduced its estimate for Class III price to $16.55, down $0.25 from July and reduced the estimate for next year to $16.15, down $0.60 from their previous estimate. Class IV price was lowered $0.25 to $15.15 this year and down $0.45 next year to $15.30. The all-milk price was lowered $0.35 to the level of $17.95 this year and reduced $0.65 next year to $17.85.
AVERAGE CLASS III PRICES
| 3 Month: | $16.77 |
| 6 Month: | $17.22 |
| 9 Month: | $17.31 |
| 12 Month: | $17.37 |
CHEESE
USDA now estimates cheese price this year to average $1.6350, down 2 cents from their July estimate. It reduced cheese price for next year by 5 cents to an average of $1.63 per pound. Dry whey price was reduced 1.50 cents this year to an average of $0.5550 per pound, while it was reduced a penny next year to an average of $0.50.
BUTTER
USDA was a bit more negative on butter prices. It reduced its estimate this year to $1.6450, down 4.50 cents from its July estimate with next year's average price reduced to $1.66, down 9 cents per pound. Nonfat dry milk price was reduced to $1.2050 while the average for next year was reduced to $1.21 per pound.
OUTSIDE MARKETS SUMMARY
September corn gained 10.75 cents, closing at $5.67. August soybeans declined 4 cents, closing at $14.015, with August soybean meal unchanged at $355.40 per ton. September wheat jumped 26.50 cents, closing at $7.5350. August live cattle closed $0.20 higher at $123.15. September crude oil declined $0.16, closing at $69.09 per barrel. The Dow gained 15 points, ending at 35,500, while the NASDAQ gained 51 points, closing at 14,816.
