MILK
The minor decline of block cheese was magnified in Class III futures with contracts through the end of the year posting double-digit losses. It seems that traders are throwing in the final bullish part of the towel putting pressure on later contracts. USDA released the December Agricultural Prices report and without the final soybean meal price, it indicates no Dairy Margin Coverage payment for the month, The average corn price was $6.58, an increase of $0.09 from November. The premium/supreme hay price was $327.00, a decrease of $4.00 per ton. The All-milk price was $24.70, down $0.90 from November. The soybean meal price is expected to be higher than November but not enough to trigger a payment as the income over feed price in November was $10.89. FSA has not yet released that price. Other prices to note that are not used in the calculation was the average soybean price was $14.40, an increase of $0.40. The alfalfa price averaged $269.00, up $2.00 from November. The Semi-annual Cattle Inventory report showed the number of dairy cattle on January1 at 9.403 million head which was just slightly higher than a year ago. Milk cow replacement heifers totaled 4.337 million head, down 2% from a year ago. there was nothing surprising in that report.
AVERAGE CLASS III PRICES
| 3 Month: | $17.76 |
| 6 Month: | $18.24 |
| 9 Month: | $18.67 |
| 12 Month: | $18.82 |
CHEESE
It was interesting to see the pressure that was put on Class III futures with only a penny decline of block cheese. Traders finally saw the futility of holding out hope for higher prices in the foreseeable future. Now, it is a long year ahead and much can change, but the futures market is an anticipatory market and right now that is what traders are anticipating. At least the block/barrels spread is moving closer together.
BUTTER
There was a lot of buying interest for butter today in the spot market. Along with the buying, there also would have been selling and the sellers did not hold back. Butter supply is increasing, and they want to continue to move product rather than hold and wait to see if buyers will be more aggressive. World prices show weakness which may eventually be seen with lower exports.
Outside Markets Summary
March corn declined 4 cents closing at $6.7975. March soybeans gained 2.75 cents ending at $15.38 with March soybean meal down $4.50 closing at $484.20 per ton. March wheat gained 8.75 cents closing at $7.6125. February live cattle gained $0.10 closing at $158.85. March crude oil gained $0.97 ending at $78.87 per barrel. The Dow gained 369 points closing at 34,086 while the Nasdaq gained 191 closing at 11,585.
