MILK
November milk futures touched $19 Monday but could not hold that level. However, it does give the impression of increased optimism in the market. It is unlikely cheese prices will fall back, which will provide support under futures. Cheese prices will need to increase again and will need to continue to trend higher or milk futures will stabilize and move in a sideways trading range. The market is trying to balance supply and demand since culling has increased, which has reduced the abundance of milk available. Supply is still available for all areas of demand with no deficit expected, but spot milk is not as available as it had been, and what is available carries with it higher prices. This has limited spot purchases from plants, leaving them content with utilizing current supplies. USDA will release the World Agricultural Supply and Demand report Tuesday. It will contain estimated production and ending stocks for grains. It will also contain estimates for milk production this year and next year as well as milk prices and product prices. The report is expected to show an increase of milk and dairy product prices from the estimates of last month.
AVERAGE CLASS III PRICES
| 3 Month: | $18.36 |
| 6 Month: | $18.12 |
| 9 Month: | $18.09 |
| 12 Month: | $18.11 |
CHEESE
Cheese is in demand, and it is also available. This leaves the fluctuation of prices up to whoever is in the market on any given day looking to fill orders or purchasing to increase ownership for expected demand. Buyers have been a bit more aggressive overall, but not to the extent that prices have been able to consistently trend higher. That may be changing, but it may take some time. It is possible the upside price potential will be limited if the supply/balance does change much more than it already has.
BUTTER
Butter futures do not show much price potential through the first few months of next year. This does not indicate that supply will tighten anytime soon. Retail demand is improving while demand from the food service industry has been fairly steady. The lack of employees at food establishments has been a hindrance to business, which has limited growth in that sector.
OUTSIDE MARKETS SUMMARY
December corn gained 2.50 cents, closing at $5.33. November soybeans fell 14.75 cents, closing at $12.2825, with October soybean meal down $1.30 per ton at $316.20. December wheat declined 2.25 cents, closing at $7.3175. October live cattle gained $0.05, ending at $125.62. November crude oil gained $1.17, closing at $80.52 per barrel. The Dow declined 250 points, ending at 34,469, while the NASDAQ lost 93 points, closing at 14,486.
