MILK
Price swings were rather wide for the trading day with December and January falling significantly below $20.00 earlier in the trading day rebounding to close back above $20.00 again. Class III futures closed mixed after early trading did not look good. Intraday volatility may increase as we move through the end of the year. Traders are trading short-term only trying to take quick profits out of the market. It would seem unlikely milk prices will rally to any great extent unless demand is stronger than anticipated and increased orders surface through the end of the year. Milk production continues to slowly increase with overall weather good for milk production. Increasing milk production is allowing for more milk to be available for manufacturing. There is sufficient milk available for both fluid and manufacturing with no concern over supply tightness. Spot milk prices are holding well for this time of year with buyers willing to purchase extra available milk to keep plants running near capacity.
AVERAGE CLASS III PRICES
| 3 Month: | $20.41 |
| 6 Month: | $20.15 |
| 9 Month: | $20.10 |
| 12 Month: | $20.12 |
CHEESE
Block cheese is now taking its turn with price weakness. Previously, barrels were weak while blocks held. Blocks may now move down to narrow the price gap between them and barrels. Demand has been holding well with American cheese inventory in October slightly below a year ago. Cheese buyers have not stepped up aggressively to purchase barrels at the low price and may not be very interested in purchasing blocks either at this time of year. Any price bounce may be short-lived.
BUTTER
The slight weakness of butter today does not provide any indication of price direction. Butter may not show the same weakness as cheese with overall demand remaining strong both domestically and internationally. Traders believe price will weaken over the next few weeks as December futures post of price of around $2.68 compared to the current price of $2.93. It will be interesting to see what happens over the next few weeks as futures will need to converge to cash.
OUTSIDE MARKETS SUMMARY
December corn gained 0.75 cents closing at $6.6875. January soybeans jumped 21 cents closing at $14.5725 with December soybean meal up $4.80 per ton closing at $413.60. December wheat fell 18.75 cents ending at $7.5675. December live cattle declined $0.50 closing at $152.57. January crude oil increased $0.96 closing at $77.24 per barrel. The Dow fell 498 points closing at 33,849 while the Nasdaq declined 177 points closing at 11,0590.
