MILK
There was a full range of emotions in the market with initial lower prices overnight followed by very strong prices just prior to spot trading, only to temper a bit into the close. There is no indication the market may be running out of strength, but some concern has developed prices may be near a plateau at which level they may remain for a period. Buyers of cheese may be satisfied with their purchases for the first quarter of the year and may hold the line for a period. Holiday demand is being assessed before orders will be placed by retailers. It is uncertain the impact the surge of COVID cases will have on shipping and transportation. Milk production will be pushed now that milk prices continue to increase, improving the outlook for milk prices. The question is whether the heavy culling of cows will slow and whether cow numbers will again begin to increase. February Class III futures closed at $21.04 and the first time a contract closed above $21 since November 2020. This is a contra-seasonal move as buyers are concerned over supplies as the year progresses. The Global Dairy Trade auction will take place Tuesday.
AVERAGE CLASS III PRICES
| 3 Month: | $19.83 |
| 6 Month: | $20.12 |
| 9 Month: | $20.12 |
| 12 Month: | $20.07 |
CHEESE
A little more stability developed in cheese Monday, which provided no indication as to market direction. Traders maintained their bullish attitude with the anticipation of stronger prices to come. Demand is strong and milk production has been slowing. This has supported prices and the outlook for prices. Traders are being cautious with cheese futures as February moved to $2 while contracts thereafter are lower.
BUTTER
Spot price continues to push higher as buyers remain aggressive. Price is now at the highest level since Sept. 1, 2017. There is no indication of price finding buyer resistance. Inventory is significantly below a year ago and will take some time to rebuild.
OUTSIDE MARKETS SUMMARY
March corn declined 4 cents, closing at $5.8925. January soybeans jumped 15.25 cents, ending at $13.44, with January soybean meal up $12.20 per ton, closing at $423.90. March wheat fell 12.75 cents, ending at $7.58. February live cattle declined $0.77, closing at $138.92. February crude oil gained $0.87, closing at $76.08 per barrel. The Dow gained 247 points, ending at 36,585, while the NASDAQ gained 188 points, closing at 15,833.
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