MILK
Class III futures closed mixed but mostly lower. Class IV futures were unchanged to slightly higher. The early strength of Class III futures waned shortly after spot trading even though the strength of blocks mostly offset the weakness of barrels. The weakness of butter offset some of the strength in nonfat dry milk, leaving milk futures with little to go on. USDA released the World Agricultural Supply and Demand report Thursday, showing a decrease of estimated milk production. Milk production this year is estimated at 226.2 billion pounds, a decrease of 200 million pounds from November. Production for 2022 is estimated at 227.7 billion pounds, a decrease of 400 million pounds from November. Beginning commercial stocks on a fat basis were left unchanged for this year at 15.6 billion pounds with 2022 commercial stocks estimated at 14.7 billion pounds, a decrease of 200 million pounds. Marketings on a fat basis were reduced 400 million pounds to the current estimate of 226.6 billion pounds. Domestic commercial use on a fat basis was reduced 500 million pounds to the current estimate of 221.8 billion pounds. The average Class III milk price this year was increased $0.10 to $17.05 with an increase of $0.40 next year to an average of $18.15. The Class IV average price this year was raised $0.05 to $16.05 with price raised $0.30 next year to $19. Note that this is significantly higher than Class III. The all-milk price was raised $0.10 this year to $18.60 and raised $0.50 to average $20.75 next year.
AVERAGE CLASS III PRICES
| 3 Month: | $19.43 |
| 6 Month: | $19.45 |
| 9 Month: | $19.43 |
| 12 Month: | $19.39 |
CHEESE
The weakness of barrels Thursday turned traders a little more negative after price increased 10 consecutive trading days. This may not turn the trend lower, but it may indicate price may have reached a threshold. USDA raised its price estimate for cheese this year to an average of $1.6750 per pound for the November estimate. The price was raised a penny next year to an average of $1.7750. Dry whey price this year was raised to $0.5750. The average price for 2022 was raised 4.50 cents from the November estimate to $0.5750, which is identical to this year.
BUTTER
The large holiday push by retail for butter is slowing, as many retail outlets have purchased ahead of time in order to confidently have supply available for demand. The featuring of butter has not been as prominent as in previous years due to price and supply. USDA raised its estimate for the average butter price this year by a penny to the current $1.73. Next year's average price was increased 3 cents to $1.94. Nonfat dry milk price was left unchanged this year at $1.27 and raised next year to $1.51, an increase of 2.50 cents from November.
OUTSIDE MARKETS SUMMARY
December corn gained 3.75 cents, closing at $5.8850. January soybeans gained 3.50 cents, closing at $12.6450, with December soybean meal up $3.20 per ton, closing at $368.80. December wheat fell 17.75 cents, closing at $7.7350. December live cattle declined $0.82, ending at $136.72. January crude oil fell $1.42, closing at $70.94 per barrel. The Dow closed unchanged at 35,755, while the NASDAQ fell 270 points, closing at 15,517.
