MILK
It has been a brutal week for Class III milk futures. The November contract declined nearly 90 cents per cwt with December down about 60 cents per cwt. Futures moved lower each day this week as underlying cash prices fell. Class IV futures declined but not to the extent of Class III futures. Class IV had to follow butter lower with futures near the same level they were a week ago. The bounce on Monday was eliminated throughout the rest of the week. August fluid milk sales showed an increase of 0.8% defying the usual trend of lower sales. Whole milk sales increased 3.1%, flavored whole milk sales fell 14.4%, reduced-fat milk slipped 0.4%, low-fat milk declined 2.8%, fat-free skim milk declined 9.0%, flavored fat-reduced milk sales increased 3.8%, buttermilk increased 3.7% with other fluid milk products gaining 20.0%. Organic whole milk sales increased 6.6%, organic flavored whole milk jumped 37.5%, organic reduced-fat milk declined 1.1%, organic low-fat milk sales declined 8.4%, organic fat-free skim milk declined 6.7%, organic flavored fat-reduced milk jumped 25.4% with other organic fluid milk product sales up 85.7%. This certainly is a good sign but likely short-lived, as it may be tied more to seasonality.
Average Class III Prices
| 3 Month: | $20.28 |
| 6 Month: | $19.75 |
| 9 Month: | $19.73 |
| 12 Month: | $19.74 |
CHEESE
For the week, blocks declined 9.75 cents with four loads traded. Barrel cheese price fell 16.50 cents with three loads traded. Dry whey declined a penny with one load traded. Buyers stepped back with no one showing up some days. It is not the fact that there is no demand, but the fact that buyers have purchased ahead and are able to get supply without difficulty in the country.
BUTTER
For the week, butter declined 6 cents with 11 loads traded with eight of those loads trading Friday. Grade A nonfat dry milk price increased 0.50 cent with four loads traded. November butter futures hold a discount in anticipation of weakness over the next few weeks. If that does not materialize, futures will close the gap and move higher to align with cash.
OUTSIDE MARKETS SUMMARY
December corn declined 1.50 cents, closing at $6.8075. November soybeans gained 5.50 cents, closing at $13.8775, with December soybean meal up $10 per ton, closing at $425.40. December wheat declined 9.25 cents, closing at $8.292. October live cattle dropped $1.02, ending at $150.37. December crude oil declined $1.18, closing at $87.90 per barrel. The Dow jumped 828 points, ending at 32,682 while the Nasdaq gained 310 points, closing at 11,102.
