MILK
Class III milk futures were able to bounce Tuesday as selling pressure on spot cheese was nonexistent. Traders did some short-covering just in case buyers may step back into the market again after the recent decline. Class III futures remain above $19 with July and August very near $20. The revisions made on the October Milk Production report and the information on the November Milk Production report indicate milk production per cow continues to hold above year-ago levels after initially falling below the previous year in August and September. However, cow numbers continue to decline as farms are still culling due to high feed costs and tight margins. In November, there were 15 of the top 24 states that showed decreases in milk production from the previous year. The largest decline took place in New Mexico with a decrease of 13.2%. Washington showed the next-largest decline of 6.7%. The rest of the states showed a decrease of less than 4.0%. The state with the largest increase was South Dakota with a gain of 16.7%. Texas followed with a gain of 2.8% followed by Iowa with a gain of 2.7%. Wisconsin gained 2.2% with the rest of the states showing gains of less than 2.0%.
AVERAGE CLASS III PRICES
| 3 Month: | $19.13 |
| 6 Month: | $19.42 |
| 9 Month: | $19.58 |
| 12 Month: | $19.63 |
CHEESE
Traders are uncertain about the direction of the market through the end of the year. Buyers likely will not be very aggressive as the big push for the holidays is finished. The outlook for demand for the first quarter of next year does not look anything out of the ordinary and could be clouded a little due to the resurgence of COVID. Demand for dairy may remain strong as people focus on more nutritious products in order the maintain a healthy diet. Dairy products fit that area of demand well.
BUTTER
Price was able to move to a new recent high and the highest price it has been since Oct. 17, 2019. Butter is in a stronger position with reduced output and decreasing inventory. USDA will release the November Cold Storage report Wednesday, which should show a further reduction of stocks remaining significantly below last year.
OUTSIDE MARKETS SUMMARY
March corn gained 7.25 cents, ending at $5.9825. January soybeans jumped 15.75 cents, closing at $13.08, with January soybean meal up $7.80 per ton, closing at $394. March wheat jumped 21.25 cents, closing at $7.99. December live cattle gained $1.05, closing at $135.52. February crude oil jumped $2.51 per barrel, closing at $71.12. The Dow gained 561 points, ending at 35,493, while the NASDAQ gained 360 points, closing at 15,341.
