MILK
Class III futures were under pressure again with most of the pressure confined to November and December contracts. All contracts were steady to lower due to the pressure from lower spot cheese prices. Class IV futures were higher in reaction to the strength of nonfat dry milk. Overall milk production continues to increase from the low levels of the summer. Production is not running leaps and bounds higher than last year and, in fact, may even fall below year-ago levels by the end of the year. Bottling demand is steady while demand from Class II products has been increasing. The combination of increasing demand in preparation of holiday items, and increasing cheese demand, has plants busy as they attempt to meet demand and have some extra on inventory for fill-in buying. There were some problems at a few balancing plants in the Midwest requiring some trucks to be diverted to other plants until the problems were fixed.
AVERAGE CLASS III PRICES
| 3 Month: | $18.30 |
| 6 Month: | $18.34 |
| 9 Month: | $18.35 |
| 12 Month: | $18.37 |
CHEESE
Block price backed further away from the top of the price range. The continued inability of price to break out and trend higher remains a concern as the calendar will be turning over to November nest week. Demand for the holidays has been increasing yet not enough to push price steadily higher. Even with the increased demand, inventory still remains significantly higher than a year ago.
BUTTER
It is unclear whether butter has reached a threshold at which buyers may be resistant or if the market took a breather today due to less buyers and sellers showing up to do business today. The market is moving closer to $2.00 level that has been elusive since early June 2020. Market participants are unsure if prices will hold through the holidays and early next year or taper off at the end of the year as demand slows.
OUTSIDE MARKETS SUMMARY:
December corn gained 5.50 cents, closing at $5.6275. November soybeans declined 5.50 cents, closing at $12.3375 with December soybean meal unchanged at $330.90 per ton. December wheat jumped 12.75 cents, closing at $7.7250. October live cattle fell $2.72, closing at $124.50. December crude oil closed $0.15 higher, at $82.81 per barrel. The Dow gained 240 points, closing at 35,730 points while the NASDAQ gained 212 points closing at 15,448 points.
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