MILK
Milk futures closed under pressure Wednesday due to the weakness of cheese and butter prices. The pattern remained intact, of which there is always some category in the daily spot market that shows weakness. That is what keeps milk prices from an extended price rally and has eliminated much of any premium that the market contained. Milk production is steady overall with some areas showing lower output, but that is being offset by improving production is other areas. Milk supply is sufficient for both bottling and manufacturing needs. The Federal order October Class I price was announced at $17.08, up $0.49 for September. This is up $1.88 from a year ago.
AVERAGE CLASS III PRICES
| 3 Month: | $16.98 |
| 6 Month: | $17.15 |
| 9 Month: | $17.29 |
| 12 Month: | $17.41 |
CHEESE
USDA released the August Cold Storage report, which, unfortunately and surprisingly, showed an increase of American cheese inventory. That is not a good situation, as inventory should decline during this time of year. American cheese inventory increased 5.8 million pounds to a total of 823.6 million pounds. Inventory is 4% above a year ago. This may keep the spot market from trending higher anytime soon, if at all, the rest of the year. Swiss cheese inventory totaled 22.5 million pounds, a decrease of 303,000 pounds with stocks 9% higher than a year ago. Other cheese inventory declined 26.8 million pounds, reaching a total of 582.6 million pounds and 4% higher than a year ago. Total cheese inventory reached 1.429 billion pounds, down 21.2 million pounds from July. Inventory remains 4% higher than a year ago.
BUTTER
The uptrend of butter price has been negated with the loss Wednesday. There is no indication as to where there will be support in the market. Butter inventory in August totaled 367.0 million pounds, down 29.5 million pounds. This now puts butter stocks 1% below a year ago. It has been a while since butter stocks were lower than the previous year. This certainly is a sign of strong demand. This should provide support to the market, but it will be up to buyers on the spot market to move prices higher. Supply is currently sufficient for demand with no concern over supply.
OUTSIDE MARKETS SUMMARY
December corn gained 8.50 cents, closing at $5.2550. November soybeans gained 8.75 cents, closing at $12.8275, with October soybean meal unchanged at $337.90 per ton. December wheat jumped 15.50 cents, closing at $7.0575. October live cattle gained $0.82, ending at $123.27. October crude oil jumped $1.74, closing at $72.23 per barrel. The Dow gained 338 points, closing at 34,258, while the NASDAQ gained 150 points, closing at 14,897.
