MILK
Class III milk prices came under pressure in nearby months as cheese prices fell further. Block cheese prices in now nearly down to the level it was before the recent rally that moved price to the top of the trading range. There is sufficient milk available for bottling and manufacturing needs, leaving buyers unconcerned over supply. The Global Dairy Trade auction trade-weighted average increased 1.9% from the previous event. There were 30,397 metric tons sold. Anhydrous milk fat gained 1.3% to $6,472 per metric ton or $2.94 per pound. Butter increased 3.5% to $5,534 per metric ton or $2.51 per pound. Cheddar cheese gained 2.2% to $5,162 per metric ton or $2.34 per pounds. Lactose increased 1.6% to $1,299 per metric ton or $0.59 per pound. Skim milk powder increased 1.4% to $3,676 per metric ton or $1.67 per pound. Whole milk powder increased 1.9% to $3,987 per metric ton or $1.18 per pound. Buttermilk powder was not offered at this event.
AVERAGE CLASS III PRICES
| 3 Month: | $17.72 |
| 6 Month: | $18.18 |
| 9 Month: | $18.39 |
| 12 Month: | $18.49 |
CHEESE
Time is running out for any significant upside price potential for cheese prices. Without the ability of the market to rally and break out of the sideways trading range during the highest demand period of the year, the outlook becomes a lot less positive. We know this is not going to continue this way, as lower prices and high cost of production will eventually result in lower supply. Or demand will eventually increase, resulting in buyers being more aggressive. The time frame for a change such as this is very difficult to determine.
BUTTER
Price held steady again Tuesday with no trading activity. Buyers and sellers seem to be comfortable at the current price level. Demand is good, production is lower, and inventory is being used to supplement fresh supply. Inventory is expected to end the year significantly lower than a year earlier.
OUTSIDE MARKETS SUMMARY
December corn declined 5.50 cents, closing at $5.71. January soybeans declined 6 cents, closing at $12.5125, with December soybean meal down $4.20, closing at $367.50 per ton. December wheat fell 16 cents, closing at $8.1025. December live cattle slipped $0.05, ending at $131.72. December crude oil declined $0.12, closing at $80.76 per barrel. The Dow gained 55 points, closing at 36,142, while the NASDAQ gained 120 points, ending at 15,974.
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