MILK
Milk production continues to increase in most regions, as central and upper Midwestern areas are seeing nearly ideal weather conditions over the last couple of weeks with cooler weather helping to improve cow comfort and overall nearly ideal fall conditions conducive to higher milk production. Fluid milk demand is stable to lower with more focus moving to Class III production for the fall and winter months, driven by higher holiday demand for cheese. Milk prices are steady to slightly lower since midweek, but the active support seen in prices over the last three weeks is helping stimulate additional price support through the entire complex. Trade volume remained extremely limited with price levels steady to 4 cents higher in all nearby contracts. The focus on all remaining 2021 contract now hovering above $18 per cwt is likely to spark renewed underlying support in the upcoming days. Traders will continue to closely monitor grain market moves as a significant rebound in corn or soybean prices over the next two weeks could create some uneasiness from many milk traders. But with harvest pressure developing in most areas for both corn and soybeans, the potential of stable grain markets may bring about further buying in nearby milk prices.
AVERAGE CLASS III PRICES
| 3 Month: | $18.39 |
| 6 Month: | $18.15 |
| 9 Month: | $18.11 |
| 12 Month: | $18.11 |
CHEESE
Cheese prices bounced higher once again Friday, moving to $1.79 per pound at the end of the week. The 2.25-cent-per-pound rally seen Friday is helping to continue to strengthen the market price as prices continue to move seasonally higher. Barrel cheese prices have now gained 48 cents per pound since setting seasonal lows in early August. The focus on firming milk prices and continued buying developing ahead of seasonal holiday and party needs is likely to spark further upward market support soon. Block cheese prices remained unchanged and untraded Friday as block prices continue to hold a narrow (2-cent-per-pound) premium over the barrel market. Trade on the Exchange Friday for barrel cheese remained light to moderate with three loads traded with one remaining unfilled bid and one uncovered offer at the end of trade activity.
BUTTER
Butter supplies continue to be readily available for buyers heading into the fourth quarter. Overall cream offerings are starting to tighten, especially in the West, but meeting production needs has not yet become an issue. It is likely that with current price levels and production schedules, overall cream needs will be met without major issues. Cash butter prices gained 2.25 cents per pound Friday, closing at $1.72 per pound. Current prices are still trading nearly 10 cents under seasonal highs seen in the middle of September, but the focus on end-of-year needs has the potential to bring additional support to the market.
OUTSIDE MARKETS SUMMARY
December corn declined 3.5 cents, closing at $5.335. November soybeans declined 4.25 cents, ending at $12.43, with October soybean meal down $1.30 per ton, closing at $317.50. December wheat fell 7.25 cents, ending at $7.34. October live cattle jumped $0.30, closing at $125.57. November crude oil gained $1.05, closing at $79.35 per barrel. The Dow fell 8 points, closing at 34,746, while the NASDAQ declined 74 points, closing at 14,579.
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