MILK
Both Class III and Class IV futures closed mixed. It was understandable that Class IV futures held due to the increase of butter price. It was a surprise to see Class III futures hold due to a second consecutive day of declines. It indicates traders continue to remain friendly to the market. However, cheese prices will need to find support and rebound, or pressure may be put on Class III futures. USDA released the World Agricultural Supply and Demand report Tuesday. USDA decreased its estimate for milk production this year by 800 million pounds to a total production of 227.0 billion pounds. The estimate for next year is 229.7 billion pounds, a decrease of 900 million pounds from the previous estimate. The Class III milk price for this year was raised 40 cents to average $17.05 with an average next year of $17.10, an increase of 65 cents from the September estimate. Class IV price was raised 15 cents to average $15.70 this year and raised $1.10 next year to an average of $17.15. The all-milk price is estimated to average $18.45 this year, an increase of 30 cents, and raised 80 cents next year to an average of $19.20.
AVERAGE CLASS III PRICES
| 3 Month: | $18.35 |
| 6 Month: | $18.13 |
| 9 Month: | $18.09 |
| 12 Month: | $18.11 |
CHEESE
Cheese is struggling again with price declines for both blocks and barrels over the past two days. Buyers were nowhere to be found Tuesday, indicating they have stepped back, allowing price to weaken. USDA was a bit more optimistic Tuesday on the World Agricultural Supply and Demand report with the estimated price increasing 4 cents to $1.68 this year and the estimate for next year raised 6 cents to $1.7150. Dry whey price was raised a penny this year to an average of 56.50 cents and increased next year by a penny to an average of 51 cents.
BUTTER
Price bounced back Tuesday but remains on the defensive. It may have a difficult time trending higher in the near term as supply and demand seem to be relatively balanced. USDA decreased their estimated price average this year by 0.50 cent to $1.6850 per pound but increased next year's estimated price average by 2.50 cents per pound to $1.7550. Nonfat dry milk price was raised 2 cents to $1.2450 this year and raised 11 cents to an average of $1.38 per pound for next year.
OUTSIDE MARKETS SUMMARY
December corn fell 10.50 cents, closing at $5.2250. November soybeans fell 30 cents, closing at $11.9825, with October soybean meal down $3.30 per ton, closing at $312.90. December wheat gained 2.25 cents, ending at $7.34. October live cattle declined $0.60, closing at $125.02. November crude oil gained $0.12, closing at $80.64 per barrel. The Dow lost 118 points, closing at 34,378, while the NASDAQ declined 20 points, closing at 14,466.
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