MILK
It has been a very good week for Class IV milk with support stemming from increasing butter and nonfat dry milk prices. Futures have increased about $3.00 in some contracts from the low 2 1/2 weeks ago. Class III futures have not moved quite that much but seem to be building a base of support. Cheese prices have not been as supportive to futures as butter price has been. Class IV futures indicate prices will remain above Class III for some time to come as Class IV futures are above Class III all through next year. There may be some limitation to the level at which Class III milk futures will increase unless cheese prices will begin to trend higher. The Pro Farmer crop tour took place this week and it showed a significant reduction of corn yields in many areas. The average yield for corn is 168.1 bushels per acre with a production of 13.759 billion bushels. This compares to USDA's estimate of 175.4 bushels per acre and a production of 14.359 billion bushels. Soybeans are estimated at 51.7 bushels per acre with a production of 4.535 billion bushels. This compares to USDA at 51.9 bushels per acre with a production of 4.530 billion bushels. This will mean higher corn prices.
AVERAGE CLASS III PRICES
| 3 Month: | $20.38 |
| 6 Month: | $20.94 |
| 9 Month: | $20.89 |
| 12 Month: | $20.82 |
CHEESE
For the week, blocks declined 8 cents closing at $1.74 with five loads traded. barrel cheese price declined 1.25 cents with 18 loads traded. Dry whey price increased 2 cents with four loads traded. Block moved back to the lowest level since January 27. Any rally of price continues to fail resulting price moving down to new lows. This has been the pattern since May. Support remains elusive.
BUTTER
For the week, butter gained 14.50 cents with 43 loads traded. Grade A nonfat dry milk gained 4 cents with nine loads traded. The breakout of butter price above the previous high indicates it may be a time before price will fall back below $3.00. Price moved back to the highest level since September 24, 2015. Buyer interest remains strong.
OUTSIDE MARKETS SUMMARY
September corn gained 11.25 cents closing at $6.6875. September soybeans jumped 52.75 cents closing at $16.0525 with September soybean meal up $20.10 per ton closing at $478.10. September wheat gained 15 cents closing at $7.8475. August live cattle declined $0.30 closing at $140.80. October crude oil gained $0.54 ending at $93.06 per barrel. The DOW fell 1,008 points at 32,283 while the NASDAQ fell 498 points closing at 12,142.
