MILK
Traders have been scalping the market or trading short-term trying to take a quick profit if it unfolds. There may not be very many long-term positions being held by speculators which limit futures movement when underlying cash moves. Hedgers are a different story as they generally will hold positions to expiration or until the desired protection is accomplished. Milk futures were under pressure as the weakness of underlying cash dictated lower prices. There are some who believe prices will hold strong moving through the holiday season. However, once the market feels orders are filled and supply is sufficient through the end of the year, spot prices will soften. Improving milk production is keeping many plants running on a full schedule. This keeps product available to the market and then some allowing inventory to increase. Bottling demand is beginning to slow as schools will be closed for a few days next week for Thanksgiving.
AVERAGE CLASS III PRICES
| 3 Month: | $21.17 |
| 6 Month: | $20.74 |
| 9 Month: | $20.58 |
| 12 Month: | $20.56 |
CHEESE
There are varying reports across the country as far as demand is concerned. Some plants report having difficulty trying to keep up with orders while other reports indicate retail demand is slowing. Loads of cheese are becoming a little easier to obtain. Some of this has to do with the variety of cheese. Exports have been strong all year and the recent decline of the U.S. Dollar might aid in keeping that demand strong. There is concern over domestic demand as food prices increase.
BUTTER
Butter sales are reported to be strong and somewhat in line with last year even though price is significantly higher. Churning is increasing as more cream is becoming available and manufacturers want to supply their regular customers as well as attempt to build some inventory. Inventory will end the year quite a bit less than last year. World market prices for butter have been trending slightly lower as consumption is being affected by strong prices. It is uncertain how butter demand will fare once the holidays are finished.
OUTSIDE MARKETS SUMMARY
December corn closed 2.25 cents higher at $6.6750. January soybeans declined 12.25 cents closing at $14.17 with December soybean meal declining $0.90 per ton closing at $405.70. December wheat declined 10.75 cents ending at $8.0675. December live cattle gained $0.95 ending at $152.75. December crude oil fell $3.95 ending at $81.64 per barrel. The Dow slipped 8 points closing at 33,546 while the Nasdaq declined 39 points closing at 11,145.
