MILK
Class III milk futures moved down to the lows established yesterday. Yesterday, prices rejected those lows with the idea the market was overdone. However, that was not the case today as further weakness of block cheese and renewed weakness of barrels pushed prices lower. Class IV futures were mostly unchanged due to little movement of underlying cash. For those of you that have not yet signed up for the Dairy Margin Coverage program next year, you need to do so by December 9th. At least that is the date USDA has indicated for the close of the signup period. However, I would not be surprised if it is not extended again as it has been ever since the program began, but do not delay and sign up by the date if you have not already done so. Supplemental Dairy Margin coverage can also be signed up for allowing farms that have increased production over the years to enroll their additional production using 2019 as a base. This needs to be enrolled in before signing up for the regular DMC program. If you have already signed up for the supplemental program last year, there is no need to sign up again.
AVERAGE CLASS III PRICES
| 3 Month: | $19.70 |
| 6 Month: | $19.79 |
| 9 Month: | $19.91 |
| 12 Month: | $19.97 |
CHEESE
The continued weakness of blocks and renewed weakness of barrels does not bode well for the market. There had been hopes holiday demand could keep prices supported, but it seems buyers have much of what they need on hand and will be less interested in buying to stock up for uncertain demand. There will be price fluctuations but likely not the periods of strength that have been seen. Increasing cheese production should supply the market with a sufficient product limiting the need for buyers to come to the spot market.
BUTTER
Buyers and sellers seem comfortable at the current level. It is unlikely price will remain at the current level through the end of the year unless demand continues to hold very strong. Churning is active with some plants reporting difficulty fill orders. Overall, increased production is allowing orders to be filled without difficulty. Buyers need to buy for customers but have little incentive to stock up.
OUTSIDE MARKETS SUMMARY
December corn declined 3 cents closing at $6.6575. January soybeans closed 2.25 cents higher at $14.5950 with December soybean meal down $5.10 per ton closing at $408.50. December wheat gained a penny closing at $7.5775. January crude oil gained $0.96 closing at $78.20 per barrel. The Dow was up one point at 33,850 at the time of this writing while the Nasdaq was down 66 points at 10,984.
