MILK
It is a tough job for Class III futures to move higher or to trend higher. There is sufficient supply for demand leaving buyers of cheese unaggressive in purchasing for upcoming holiday demand. If prices cannot move higher over the next month, it may be difficult for prices over $18.00 to hold moving into next year. With milk production slowly improving and demand holding somewhat steady or slowly improving, traders see no reason to get excited over prices. The weakness of dry whey set a bit of a negative tone in the market after having made a nice run higher. August fluid milk sales were 1.8% below a year ago continuing the trend of reduced fluid milk consumption. Whole milk sales increased 1.6%. Flavored whole milk jumped 30.8%. Reduced fat milk sales declined 4.6%; low fat was down 3.7%; fat-free declined 9,.5%; flavored fast reduced declined 14.6%; buttermilk sales declined 1.8% and sales of other fluid milk products increased 12.1%. Organic whole milk sales increased 6.8%; organic flavored while milk increased 13.2%; organic reduced fat milk increased 0.4%, organic low-fat milk increased 2.5%; organic fat-free skim milk declined 13.4%; organic flavored fat-reduced milk sales declined 15.1% and other organic fluid milk products increased 69.4%.
AVERAGE CLASS III PRICES
| 3 Month: | $17.53 |
| 6 Month: | $17.92 |
| 9 Month: | $18.18 |
| 12 Month: | $18.35 |
CHEESE
Barrels show greater buying interest, but the strength is offset by the weakness of blocks. Some plants have indicated inventories have decreased as demand has improved. However, others indicate inventory has been stable. We will know more when USDA releases the cold storage report on Wednesday.
BUTTER
Butter is a real market with buyers remaining interested in purchasing supply at current levels. The market does not seem to be inflated or running on emotion. Buyers and sellers are doing business as needed. Butter futures show a deep discount for contract next year with futures trading at the $2.50 level.
OUTSIDE MARKETS SUMMARY
December corn closed down 5.25 cents per bushel at $4.9025, November soybeans closed down 15.50 cents at $12.8675 and December soybean meal closed down $3.40 per ton at $420.50. December Chicago wheat closed up 1.25 cents at $5.8725. December live cattle closed down $6.28 at $178.35. December crude oil is down $2.59 per barrel at $85.49. The Dow Jones Industrial Average is down 191 points at 32,936 with the NASDAQ is up 35 points at 13,018.
