MILK
There was a definite dividing line between Class III futures from December through June being unchanged to lower while July and later contracts were higher. January and February Class III contracts slipped below $20 again but not by much, with January closing at $19.98 and February at $19.93. There are discussions as to the level at which some believe milk prices will move to as the market has turned bullish. The duration of the current strength of the market is unclear. However, it certainly looks promising at present. A tightening milk supply is increasing the concern of manufacturers and buyers. Manufacturers are trying to look ahead as to the steps they need to take to make sure they receive sufficient milk to operate efficiently while buyers are looking ahead and taking steps to make sure they increase ownership of product even if they need to store it for a longer duration. It certainly will be an interesting end to the year.
AVERAGE CLASS III PRICES
| 3 Month: | $19.51 |
| 6 Month: | $19.58 |
| 9 Month: | $19.62 |
| 12 Month: | $19.60 |
CHEESE
Block cheese price seems to be heading toward the $2 level where it has not been since November 2020. Cheese supply is not tight, but there is fear that supply could be tighter next year if demand remains strong. This is prompting buyers to be more aggressive in increasing ownership of supply as they look ahead to next year. Aging programs are being replenished sooner than usual and at higher prices, as there is a certain fear over future supply. Buyers would rather pay the price of storage rather than face escalating prices or difficultly finding production to fill customer orders. It will be very interesting to see what November cold storage will show when the report is released next week.
BUTTER
Price has taken a breather but remains supported. Strong domestic and international demand will keep supply moving and inventory from building anytime soon. Cream will be more available over the next few weeks as strong Class II demand slows and schools are closed for a could weeks. Butter output should increase.
OUTSIDE MARKETS SUMMARY
March corn gained 5.25 cents, closing at $5.9025. January soybeans jumped 15.50 cents, closing at $12.5950, with January soybean meal up $14.80 per ton, closing at $376.80. March wheat slipped 1.75 cents, closing at $7.87. December live cattle declined $0.17, ending at $136.77. January crude oil declined $0.56, ending at $70.73 per barrel. The Dow declined 107 points, closing at 35,544, while the NASDAQ declined 176 points, closing at 15,238.
