MILK
Class IV milk futures posted some nice gains even though butter price slipped, and nonfat dry milk price remained unchanged. Class III milk futures were mixed. There was little to give traders are real direction for the market moving forward. Milk production is improving seasonally with milk being available for both bottling and manufacturing. The industry is not concerned over a supply shortage as the increasing buying for holiday demand is being met without buyers having to come to the spot market aggressively. There is sufficient supply in the country to take care of buyers' needs. This leaves limited need to come to the daily spot market to look for product. The cost of production is high and with the current prices in the futures market moving through the end of the year and into next year, it does not provide a very profitable outlook.
AVERAGE CLASS III PRICES
| 3 Month: | $20.83 |
| 6 Month: | $20.20 |
| 9 Month: | $20.07 |
| 12 Month: | $20.04 |
CHEESE
American cheese inventory increased 1.5 million pounds in September totaling 843.0 million pounds according to the cold storage report. It is usual to see inventory increase during this time of year when buying becomes more active and more aggressive. Inventory is about right in line with a year ago. Swiss cheese inventory increased 1.9 million pounds totaling 23.1 million pounds and 5% above a year ago. It is noteworthy that inventory in August was 6% below a year ago with September inventory 5% above a year ago. Other cheese stocks declined 19.1 million pounds totaling 620.3 million pounds and remains 6% above a year ago. Total cheese inventory declined 38.1 million pounds totaling 1.484 billion pounds, up 4% from a year ago.
BUTTER
Butter inventory declined 11.0 million pounds totaling 267.3 million pounds. This is 18% below a year ago. The August report showed inventory 22% below a year earlier. Even with the decline, supply may be able to move closer to where they were a year earlier by the end of the year. The decrease in inventory for the month was rather light.
OUTSIDE MARKETS SUMMARY
December corn declined 2.75 cents closing at $6.8150. November soybeans fell 23.50 cents ending at $13.72 with December soybean meal down $9.20 per ton closing at $408.70. December wheat declined 12 cents closing at $8.3875. October live cattle gained $1.12 closing at $151.60. December crude oil declined $0.47 ending at $84.58 per barrel. The DOW gained 417 points ending at 31,500 while the NASDAQ gained 93 points closing at 10,953.
