MILK:
Class III milk futures have exhibited strength the past two days due to more support seen in underlying cheese and dry whey prices. Class IV futures have had minor support as well but have not moved much. There is a long way to go to move milk prices back up to where they were in July. The market may run out of time before the holidays and end of the year are upon us. Without a strong price rally through the end of the year, it will leave the first half of next year in jeopardy of lower prices than are currently being seen. However, if the trend of higher culling and slowing milk production continues, higher prices could materialize sometime during the first half of next year. Current fundamentals would not suggest this is a high probability. USDA will announce the September Federal Order class prices Wednesday with the trade anticipating a Class III price of $16.53 and a Class IV price of $16.40.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.52 |
| 6 Month: | $17.50 |
| 9 Month: | $17.57 |
| 12 Month: | $17.65 |
CHEESE:
Cheese prices are moving, but remain in a sideways trading range. I have never seen markets that have remained in ranges as much and as long as they have this year. Dry whey has been the market that has shown the most price strength recently. This has provided support to Class III prices that has been lacking from the cheese market.
BUTTER:
The outlook for butter is not very exciting with futures right in line with cash through February of 2022. Buyers and sellers continue to take care of business as they see fit without any concern over supply tightness. Inventory is decreasing, but there is plenty of supply available to meet demand. Retail orders will be improving as the holidays approach.
OUTSIDE MARKETS SUMMARY:
December corn declined 5.75 cents lower at $5.4550. November soybeans fell 10.50 cents, ending at $12.77 with October soybean meal unchanged at $337.30 per ton. December wheat fell 15.75 cents, closing at $7.0650. October live cattle declined $0.40, closing at $122.00. November crude oil declined $0.16, ending at $75.29 per barrel. The DOW fell 569 points, closing at 34,300 while the NASDAQ fell 423 points, closing at 14,547 points.
