MILK
Class III milk futures closed under pressure again Tuesday after the large drop of barrel cheese price. However, all things considered, milk futures held up well despite the bearish pressure. Class IV futures moved in the opposite direction due to support from butter and nonfat dry milk. Futures posted some double-digit gains in contracts in 2022 as traders turn more bullish to Class IV, and it is about time. Open interest is increasing along with trading volume. In the past, there had been days during which no contracts were even traded. That certainly has changed. Class IV futures from November on out through all next year are now above Class III futures. The Global Dairy Trade auction took place Tuesday with the trade-weighted average increasing 4.3%. Anhydrous milk fat increased 4.2% to $6,384 per metric ton or $2.90 per pound. Butter increased 4.7% to $5,350 per metric ton or $2.43 per pound. Buttermilk powder declined 3.8% to $3,513 per metric ton or $1.59 per pound. Cheddar jumped 14.1% to $5,058 per metric ton or $2.29 per pound. Lactose gained 1.6% to $1,272 per metric ton or $0.58 per pound. Skim milk powder increased 6.6% to $3,627 per metric ton or $1.65 per pound. Whole milk powder gained 2.7% to $3,921 per metric ton or $1.78 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $18.32 |
| 6 Month: | $18.40 |
| 9 Month: | $18.41 |
| 12 Month: | $18.43 |
CHEESE
There is a huge difference between global cheese price and the U.S. price. Some of this is due to the logistics and difficulties of shipping, which has tightened supply in some countries. Yet, the U.S. continues to see strong exports with that difference in price likely a big reason for strong international demand due to U.S. prices being very attractive. However, supply continues to remain large.
BUTTER
Price is going to move to $2 and maybe higher Wednesday or likely before the end of the week. The butter/powder market certainly has strong support and is pushing Class IV futures steadily higher. Retail demand is strong and increasing with buyers order ahead of usual in the attempt to make sure they will have product when they need it.
OUTSIDE MARKETS SUMMARY
December corn declined 6 cents, closing at $5.73. November soybeans gained 7.25 cents, closing at $12.44, with December soybean meal up $8.10 per ton. December wheat declined 5.75 cents, closing at $7.9150. December live cattle gained $1.10, ending at $129.95. December crude oil declined $0.14, ending at $83.91 per barrel. The Dow gained 139 points, closing at 16,053, while the NASDAQ gained 54 points, ending at 15,650.
