MILK
Milk production is slowly improving across the country as weather has been very good for cow comfort. Production is not growing by leaps and bounds but is allowing for more milk to be available for production. That is likely what is keeping cheese and butter prices from breaking out. Demand is improving, but it is not enough to tighten supply. With the summer past and cooler weather upon us, there will likely not be any supply tightness. This is the highest demand time of year and sufficient supply will keep both bottlers and manufacturers satisfied. Milk futures have made an impressive rally over the past few weeks with traders seemingly intending to hold current futures prices unless underlying prices move overwhelmingly in the other direction. The idea is that price weakness will be short-lived, and prices will again rebound.
AVERAGE CLASS III PRICES
| 3 Month: | $18.63 |
| 6 Month: | $18.37 |
| 9 Month: | $18.28 |
| 12 Month: | $18.26 |
CHEESE
Cheese prices seem to find resistance at the top of the price range. Once prices move to that level, sellers are willing to bring product to the market more aggressively, resulting in buyers stepping back. Thus, the pattern continues with the up-and-down teeter-totter movement. USDA will release the September Cold Storage report on Friday, which will hopefully indicate American cheese supplies have decreased during the month. If we have a repeat of last month, then it may be long fall and winter ahead of us.
BUTTER
Butter price does not seem to know if it wants to remain above cheese or below cheese, as it continues to flip positions. This will continue unless demand improves more than it already has. Cream is readily available, keeping churning active. Some plants continue to shy away from higher spot cream prices being content to process regular supply.
OUTSIDE MARKETS SUMMARY
December corn gained 7 cents, closing at $5.3275. November soybeans gained 3.75 cents, closing at $12.2150, with December soybean meal up $1.30 per ton, closing at $317.90. December wheat gained 2.25 cents, ending at $7.3625. October live cattle declined $0.52, closing at $125.45. November crude oil gained $0.16, ending at $82.44 per barrel. The Dow is down 36 points, closing at 35,258, while the NASDAQ is up 124 points, closing at 15,022.
