MILK
Milk production is showing some improvement in parts of the central region, while others indicate production is holding steady. Plants certainly are not being overwhelmed with milk. Spot milk has tightened to where there is no discount with some available slightly above class. Milk continues to move to the Southeast to make up the deficit for the time being as hot weather continues to hinder milk production growth. Class III futures took another hit Thursday due to traders not liking the fact that cheese prices did not increase with no buyers showing up to the market. The market is back in the mode where steady cheese prices are viewed as negative. Class IV futures were mixed as the increase of nonfat dry milk price offset the decrease of butter price. Overnight trading is likely to be very light and mixed as traders have adjusted futures to underlying cash.
AVERAGE CLASS III PRICES
| 3 Month: | $20.87 |
| 6 Month: | $21.04 |
| 9 Month: | $20.97 |
| 12 Month: | $20.88 |
CHEESE
Demand is reported to be increasing depending on variety. Mozzarella cheese sales have increased significantly as pizza demand has increased. Some plants report tightening cheese stocks. Cheese plants are maintaining steady production with anticipation milk receipts may begin to increase in the next few weeks. Cheese futures are maintaining a premium through the end of the year in anticipation of stronger prices.
BUTTER
There is concern about stocks at the end of the year. If demand increases and export demand remains strong, inventory may close the year substantially below a year ago. Price has slipped back the past two days, but the weakness is expected to be temporary. Retail and the food service industry are buying further ahead of the usual time they purchase.
OUTSIDE MARKETS SUMMARY
December corn declined 4.75 cents, closing at $6.7750. November soybeans declined 3.50 cents, closing at $14.5150, with October soybean meal up $4.90 per ton, closing at $434.50. December wheat fell 27.25 cents, ending at $8.45. October live cattle gained $1.27, closing at $145.62. October crude oil fell $3.38, closing at $85.10 per barrel. The Dow declined 173 points, closing at 30,962, while the NASDAQ declined 167 points, closing at 11,552.
