MILK
Milk futures showed some strong gains today in both classes. October Class III futures closed solidly above $19. The gains improved the outlook for milk prices through the end of the year. This took place despite the limited underlying movement of spot prices. Even though cheese prices remained steady and dry whey declined, futures increased as traders were aggressive buyers. The attitude may have changed with steady cheese prices being viewed as supportive rather than negative. Milk supply is being stretched with strong bottling demand to fill school accounts and increased demand for some cheese varieties. Milk receipts are lower due to recent hot weather and reduced cow numbers. There is some concern over the number of replacements that may be available down the road due to the strong interest in beef on dairy to improve farm income if beef prices remain strong. It may be interesting for rest of the year and next year. Of course, each year is always interesting. There is always some new record being set or a new outside influence affecting the market.
AVERAGE CLASS III PRICES
| 3 Month: | $18.92 |
| 6 Month: | $18.77 |
| 9 Month: | $18.69 |
| 12 Month: | $18.68 |
CHEESE
Cheese demand is steady with some varieties showing an increase. Cheese demand for pizza has increased substantially with some suppliers questioning whether they can meet the demand. Reduced milk volumes available for cheese production are lower, but supply remains sufficient for manufacturing but extra is hard to find.
BUTTER
Price is pushing up near the previous high. Buyer interest today absorbed the volume of loads offered on the spot market and still was able to close higher. Buyers are looking ahead to expected demand and are increasing ownership in preparation. However, exports continue to lag behind last year and inventory remains higher, which may limit upside potential.
OUTSIDE MARKETS SUMMARY
December corn closed up .50 cent per bushel at $4.8625, November soybeans closed down 16.75 cents at $13.5950 and December soybean meal closed down $3.90 per ton at $395.30. December Chicago wheat closed down 9.25 cents at $5.9975. October live cattle closed up $0.95 at $183.65. October crude oil is down $0.67 per barrel at $86.87. The Dow Jones Industrial Average is up 57 points at 34,501 with the NASDAQ down 124 points at 13,749.
