MILK
Class IV futures have put in some really strong days with futures regaining what was lost over the past two weeks. Traders are not convinced prices will trend higher but need to buy into a stronger market with the anticipation they will be able to make a profit on the move. There is little to support a change in trend. Spot milk is still being offered for as much as $10.00 below class. This has been for five consecutive weeks and unusual for this time of year. This generally happens during the end of the year holiday when schools are closed but not 5 weeks after. There are some areas indicating spot milk is moving close to $5.00 under class which would be a little more in line with the usual. Bottling demand remains steady. Dairy Market News reports milk production in California is seasonally light impacted by the recent heavy rainfalls. Cow lots are beginning to dry out. Those areas of the state that had not been affected as much have plentiful milk supply.
AVERAGE CLASS III PRICES
| 3 Month: | $17.95 |
| 6 Month: | $18.42 |
| 9 Month: | $18.85 |
| 12 Month: | $18.99 |
CHEESE
There are reports that export demand for cheese is softening. The Global Dairy Trade auction events have been pointing to weaker world prices. However, domestic cheese sales are doing well overall. Heavier production schedules for cheese continue as there is sufficient milk available for manufacturing.
BUTTER
The recent strength of butter and nonfat dry milk has generated higher Class IV futures prices. Buyers seem to want to take advantage of the lower prices to begin increasing ownership for futures needs. Holding back for lower prices may not be in their best interest. Up to this point, forward contracting has been limited as buyers felt lower prices would unfold. This thinking may be changing. USDA will release the December Dairy Products report tomorrow which will show the level of production for most dairy products providing some indication as to supply in the future.
Outside Markets Summary
March corn declined 5.75 cents closing at $6.7525. March soybeans gained 14 cents ending at $15.3425 with March soybean meal up $7.10 per ton closing at $491.80. March wheat gained 1.25 cents closing at $7.61. February live cattle gained $1.32 ending at $159.75. March crude oil declined $0.53 ending at $75.88 per barrel. The Dow slipped 39 points ending at 34,054 while the Nasdaq jumped 385 points closing at 12,201.
