MILK
It is interesting how the mind works and how the trade reacts. As block cheese price moved to the top of the trading range that it has been in for a year, traders began buying into the market in anticipation of the potential for an uptrend to finally materialize. However, there was concern the strength of underlying cash might not continue. That came to reality Friday, as support was removed by the decline of underlying cash. What is more interesting is the fall of milk futures, despite block cheese price being quite a bit stronger for the week, eliminated all of the gains for the week. This does not bode well for milk prices as the end of the year draws near. Demand for fluid milk should improve as holiday specialty milk products are produced and featured, such as eggnog. However, much of the holiday buying by packagers and recutters for gift boxes as well as retail outlets seems to have finished early.
AVERAGE CLASS III PRICES
| 3 Month: | $17.83 |
| 6 Month: | $18.29 |
| 9 Month: | $18.42 |
| 12 Month: | $18.49 |
CHEESE
The strong move higher for blocks was a sight to behold after two previous bearish weeks. Price was poised to break out of the sideways range it has been in for a year, providing hope for higher milk prices through the end of the year. However, the buyer that had been aggressively trying to get a load of cheese purchased finally accomplished the task Friday. However, that left a void under the market, which was feared to exist, allowing price to decline with no further buying interest for blocks. Barrels had been lagging, and the decline Friday moved price below the previous low. For the week, blocks jumped 16.50 cents with four loads traded. Barrels declined 0.50 cent with 40 loads traded. Dry whey gained a penny with one load traded.
BUTTER
For the week, butter gained 1.50 cents with 17 loads traded. Grade A nonfat dry milk declined 2 cents with 16 loads traded. Butter has had a difficult time trying to reach the $2 level. This may be as good as it gets unless demand improves further and inventory decreases more rapidly. Retail demand is improving as grocers prepare for holiday baking demand.
OUTSIDE MARKETS SUMMARY
December corn gained 7.75 cents, closing at $5.7725. January soybeans jumped 22.75 cents, closing at $12.4425, with December soybean meal jumping $17.60 per ton, closing at $362.10. December wheat gained 4.50 cents, closing at $8.17. December live cattle gained $0.25, closing at $132.12. December crude oil fell $0.80, closing at $80.79 per barrel. The Dow gained 179 points, ending at 36,100, while the NASDAQ gained 157 points, closing at 15,861.
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