MILK
Even though there was another large decline in barrels and a decline in blocks, Class III milk futures held well. Some of it had been factored in but some of the reason might be the disbelief that prices will continue to erode at this time of year. However, there is concern that the top may have been reached as the market is now heading into the holiday period when most of the buying that is done ahead of time is finished. Regular demand and fill-in buying for orders will be the main activity. USDA released the October Milk Production report today which showed continued strong milk output. Production in the top 24 states increased 1.4% totaling 18.1 billion pounds. Production per cow averaged 2,021, up 18 pounds from October 2012. Cow numbers increased 1,000 head and are 42,000 head more than a year ago. Milk production in the United States increased 1.2% totaling 18.9 billion pounds Production per cow averaged 2,001, up 17 pounds from a year ago. Cow numbers for both the U.S. and the top 24 states increased 1,000 head. Cow numbers are quite a bit higher than a year ago. The top 24 states showed 42,000 more cows while the U.S. showed 31,000 more cows than a year ago.
AVERAGE CLASS III PRICES
| 3 Month: | $20.93 |
| 6 Month: | $20.44 |
| 9 Month: | $20.31 |
| 12 Month: | $20.30 |
CHEESE
The weakness of block cheese today may start the ball rolling to the downside. It may not fall as rapidly as barrels, but buyers may hold back now as they saw weakness today. Demand will be ongoing but maybe not quite to the level it has been. Much of the aggressive purchasing to fill orders and to have extra on hand may have concluded with buying confined to fill-in orders or the desire to have some extra inventory on hand of fresh cheese.
BUTTER
The rebound of butter today keeps traders guessing as to where the market will settle when buyers and sellers find a comfortable level. Price did not regain all of the loss of Friday with buyers taking advantage of the lower price. The nature of the market is such that price could fall back again tomorrow. USDA will release the cold storage report tomorrow providing an idea of demand during October. Production is currently increasing as manufacturers want to build inventory over and above current demand.
OUTSIDE MARKETS SUMMARY
December corn declined 8.25 cents closing at $6.5950. January soybeans gained 8.50 cents closing at $14.3675 with December soybean meal up $1.00 per ton closing at $411.40. December wheat declined 4 cents closing at $7.9925. December live cattle gained $0.47 ending at $153.55. January crude oil slipped $0.07 ending at $80.04 per barrel. The Dow declined 45 points closing at 33,700 while the Nasdaq declined 122 points closing at 11,025.
