MILK
Milk futures showed some nice gains Wednesday, making it the third consecutive day of price increases. It is too early to say whether this strength of cheese prices will continue and break out of the sideways trading range. It is now looking more favorable that Class III milk futures could move back to the $18 level. Overall milk production is improving and is balanced with current processing needs. However, even though supplies are sufficient for demand, there continue to be difficulties in moving product to where it needs to be. Truck driver shortages continue to plague the industry to some extent, which can create shortages for some buyers. Milk and product are moving around, but not with the efficiency that it has in the past in many instances. The September Federal Order class prices were announced Wednesday. Class II price was announced at $16.89, an increase of $0.38 from August and up $3.73 from September 2020. Class III price was $16.53, up $0.58 from the previous month and only up $0.10 from a year ago. Class IV was announced at $16.36, up $0.44 from August and up $3.61 from a year ago. USDA will release both the Quarterly Grain Stocks report on 11 am Central time and the August Agricultural Prices report at 2 pm Central time tomorrow. The Agricultural Prices report will be used to calculate income over feed for the month.
AVERAGE CLASS III PRICES
| 3 Month: | $17.77 |
| 6 Month: | $17.66 |
| 9 Month: | $17.70 |
| 12 Month: | $17.76 |
CHEESE
Cheese demand is increasing seasonally and may be affecting the market more strongly. Buyers are purchasing cheese for recutting and packaging for gift boxes. Orders are already beginning to increase from retail outlets. The consensus is that cheese inventories are balanced. However, the last cold storage report showed American cheese stocks at a higher level than a year ago.
BUTTER
Orders are increasing seasonally, which puts manufacturers in a quandary. They would like to churn more butter, but they are limiting themselves to regular supply rather than purchasing cream on the spot market at higher prices. Manufacturers want to move product as soon as possible rather than hold for higher prices that may not materialize.
OUTSIDE MARKETS SUMMARY
December corn gained 4.75 cents, closing at $5.20. November soybean meal gained 6.75 cents, ending at $12.8375, with October soybean meal gaining $0.80 per ton, closing at $338.10. December wheat gained 3.75 cents, ending at $7.1025. October live cattle declined $0.22, closing at $121.77. November crude oil declined $0.46, ending at $74.83 per barrel. The Dow gained 91 points, ending at 34,391, while the NASDAQ declined 34 points, closing at 14,512.
