MILK
Front-month January has nearly eliminated its gains from before the holidays. It looked as if the milk price was going to be above $20.00 for another month, but that was quickly turned on its head over the past two trading days. Before the holidays, traders were wondering how much strength the market would have. Now, they are wondering how much weakness will unfold. February and later Class III contracts are making new lows again moving prices to the lowest levels since December 2021. It would be nice if prices could follow a similar pattern of 2022 and there is that possibility. However, there will need to be a significant shift in supply and demand for that to be accomplished. The average soybean meal price for November has been released for use in calculating income over feed for the Dairy Margin Coverage program. The average price for November was $436.75 per ton. This was a decrease of $32.00 per ton from October. This puts income over feed at $10.89. This is the highest income over feed since June leaving no payment under the Dairy Margin Coverage Program. Normally, the Federal Order class prices would be announced tomorrow. Due to the holiday and extended weekend, the December prices will be announced on Thursday with tomorrow being the final day to trade December futures and options.
AVERAGE CLASS III PRICES
| 3 Month: | $19.26 |
| 6 Month: | $18.92 |
| 9 Month: | $19.13 |
| 12 Month: | $19.34 |
CHEESE
We have not seen a one-day decline of block cheese price of this magnitude since November 11, 2014. There have been increases that have been similar but not price weakness. Buyers either did not show up in the market or they had no interest in purchasing even at the lower prices. Whether this will increase the interest of buyers at the lower price or if the weakness will leave buyers on the sidelines will be seen as the week progresses.
BUTTER
Butter price held today as traders assess holiday demand. Buyers may need to step up to purchase and replenish supply if demand has been strong. Otherwise, price may drift lower as time moves on. Increased churning should keep sufficient butter available to the market. This may leave buyers less aggressive.
OUTSIDE MARKETS SUMMARY
March corn declined 8 cents closing at $6.7050. January soybeans fell 32 cents closing at $14.8725 with January soybean meal down $1.70 closing at $476.80 per ton. March wheat declined 16.50 cents closing at $7.7550. February crude oil fell $3.33 closing at $77.15 per barrel. The Dow closed 11 points lower at 33,136 while the Nasdaq declined 80 points closing at 10,387.
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