MILK
Both Class III and Class IV futures have had some nice strength as the market seemed to point to higher prices. It is interesting to see that the strength of Class III futures was due more to perception rather than to actual underlying price strength. Dry whey was the only category directly affecting Class III futures, and that only showed a minor gain. The rest of the strength stemmed from the perception of higher prices and a growing optimism. If the trend of lower production per cow and declining cow numbers holds through the end of the year, further support could surface as supply could tighten. However, cheese prices will need to break out of the range that they have been in for much of the year. The City Average Retail price for whole milk increased 3 cents for August with price averaging $3.59 per gallon, an increase of 14 cents from September 2020.
AVERAGE CLASS III PRICES
| 3 Month: | $18.66 |
| 6 Month: | $18.38 |
| 9 Month: | $18.28 |
| 12 Month: | $18.26 |
CHEESE
Cheese prices did not put in as good of a week as one would have anticipated due to the strength of Class III futures. For the week, blocks declined 3 cents with nine loads traded. Barrels remained unchanged with eight loads traded. Dry whey increased 0.75 cent with seven loads traded. Generally, this would have kept pressure on Class III futures, but not at this point. Traders have turned more bullish recently and even some price weakness does not carry the same weight it did a few weeks ago. The City Average Retail price for a pound of natural cheese increased 5 cents from August to $5.39. The average price for a pound of processed cheese is $4.02, an increase of 4 cents from August.
BUTTER
For the week, butter increased 5.50 cents with 30 loads traded. Grade A nonfat dry milk price increased 7.25 cents with 13 loads traded. Retail butter demand is improving as they prepare for upcoming holiday consumer demand. Cream supply is available keeping churning active. Inventory is sufficient to supplement fresh production, but stocks are declining with current levels below a year ago.
OUTSIDE MARKETS SUMMARY
December corn gained 9 cents, closing at $5.2575. November soybeans gained 11.50 cents, ending at $12.1775, with December soybean meal gaining $2.50 per ton, closing at $316.60. December wheat gained 9.25 cents, closing at $7.34. October live cattle closed $0.22 higher at $125.97. November crude oil increased $0.97, ending at $82.28 per barrel. The Dow gained 382 points, closing at 35,295, while the NASDAQ gained 74 points, closing at 14,897 points.
