MILK
Class III milk futures made a nice run higher this week with November and December gaining about $1 per cwt. Whether these gains will hold will be up to the strength of underlying cash. November and December were able to move and close out the week above $18. This certainly is a change from the pattern that has been prevalent for quite some time. In fact, futures had the largest price increase over the course of the week for the life of the contracts. Milk production is improving seasonally across most of the country, allowing for sufficient milk supply for both bottling and manufacturing. Milk supply is not over burdensome, which could allow for further upside price potential. Spot milk supply is tighter with prices generally at or above class prices.
AVERAGE CLASS III PRICES
| 3 Month: | $18.07 |
| 6 Month: | $17.87 |
| 9 Month: | $17.85 |
| 12 Month: | $17.88 |
CHEESE
Cheese prices increase substantially this week with blocks of 14.25 cents with only five loads traded. Barrel cheese increase 14.50 cents with 17 loads traded. Dry whey increased 0.75 cent with one load traded. Class III futures should have increased more than they had given the rise of underlying cash. However, traders retain a bit of caution in the market as the pattern of the past year remains on their minds. Price rallies have not been sustained for long durations. That pattern may finally be changing.
BUTTER
For the week, butter increased 2 cents with 33 loads traded. Grade A nonfat dry milk increased 3.75 cents with 23 loads traded. It has been quite some time since all categories of the spot market have increased in the same week. Price continues to struggle, which has been leaving the market choppy. Retail orders are increasing slowly, but demand from the food service industry is somewhat stagnant.
OUTSIDE MARKETS SUMMARY
December corn gained 4.75 cents, closing at $5.4150. November soybeans declined 9.50 cents, ending at $12.4650, with October soybean meal down $1.20 per ton, closing at $325. December wheat jumped 29.75 cents, closing at $7.5525. October live cattle slipped $0.17, ending at $120.40. November crude oil gained $0.85, closing at $75.88 per barrel. The Dow closed 483 points higher at 34,326, while the NASDAQ gained 118, closing at 14,567.
