Further selling pressure resumed on Class III futures in reaction to losses in cheese prices. October Class III futures have lost over $2 per cwt over the past two weeks. December futures declined about $1.75. November futures tested the low today but were able to bounce. Class IV futures gained on the strength of butter and nonfat dry milk. After Class III milk futures were marked to market for the day, Class III futures showed strength, trimming some of the losses. Traders may want to cover short positions after the losses today and the steep declines recently to protect their income in case futures rebound. Milk production across the country is variable along seasonal levels. Demand for milk from all classes of milk is steady. The October Class I milk price was announced at $19.47, up $0.47 from September. The price a year ago was $22.71.
AVERAGE CLASS III PRICES3 Month: | $17.55 |
6 Month: | $17.72 |
9 Month: | $17.88 |
12 Month: | $18.05 |
Cheese has basically been in a freefall primarily for barrel prices. The price has fallen 20 cents over three days. It is not an unprecedent drop but it ranks up there with the few. It is interesting that Dairy Market News reports that barrel cheese demand in the Midwest is termed steady. Supply has not increased to any extent, making it surprising since trading activity on the spot market has been as bearish as it has been. With sellers wanting to move product, buyers continue to pull back to purchase at lower prices.
BUTTERThe market is showing good strength, but there is concern that the price may not hold. The higher price is pulling more buyers off the sideline to purchase before the price moves too much higher. The price is quite a bit higher than the World price, which will continue to hinder exports. However, improving domestic demand is increasing buying interest.
OUTSIDE MARKETS SUMMARYDecember corn closed up 6 cents per bushel at $4.8225, November soybeans closed up 4.50 cents at $13.2000 and December soybean meal closed up $5.90 per ton at $395.10. December Chicago wheat closed up 4.75 cents at $5.8875. December live cattle closed up $1.05 at $191.53. November crude oil is down $0.82 per barrel at $89.66. The Dow Jones Industrial Average is down 77 points at 34,441 with the NASDAQ down 209 points at 13,469.