MILK
It was good to see most Class III futures close in positive territory after about two weeks of freefalling. It is unlikely futures will regain much of the loss anytime soon as buyers may not be very aggressive through the end of the year. Traders are bearish overall due to seasonally increasing milk production and growing cheese inventory. The high demand time of year has not been able to net any real benefit for milk checks. For a while, it appeared November Class III price might have been able to achieve $20.00 or more and would be the high for the year. However, that most likely will not happen, due to only having about one week remaining during which much of the pricing is factored in and the contract basically flatlines. Without a price increase and a higher trending market through the rest of this year, it dims the price potential for next year when demand generally slows. Class IV prices look more promising through the end of the year and should remain above Class III prices. USDA will release the World Agricultural Supply and Demand (WASDE) report tomorrow showing USDA's estimates for milk production and milk and dairy product prices.
AVERAGE CLASS III PRICES
| 3 Month: | $17.93 |
| 6 Month: | $18.22 |
| 9 Month: | $18.34 |
| 12 Month: | $18.40 |
CHEESE
The strength of cheese price today was not a turn of trend, but a result of buyers wanting to take advantage of lower prices to purchase supply for orders and to increase ownership for expected demand during the next two months. Sellers were not shy about offering loads of barrels on the spot market with those loads being snapped up and price still able to close higher.
BUTTER
Butter inventory is steadily declining as production is lower than a year ago and demand is improving. Inventory is expected to end the year significantly below the level of last year. Higher cream prices have reduced production as many plants are unwilling to pay higher prices for extra spot cream. They are content to use regular supply, resulting in reduced production schedules. Higher prices may still unfold before the end of the year.
OUTSIDE MARKETS SUMMARY
December corn slipped 1.50 cents, closing at $5.5150. November soybeans fell 14.25 cents, closing at $11.78, with December soybean meal down $0.90 per ton to close at $331.80. December wheat gained 1.50 cents, ending at $7.68. December live cattle gained $0.30, closing at $132.10. December crude oil gained $0.66, closing at $81.93 per barrel. The Dow gained 104 points to close at 36,432 points while the NASDAQ gained 11 points, closing at 15,982 points.
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