MILK
It has been a while since milk futures moved limit up. The December Class III contract did just that Wednesday with the price closing at $18.59. The July through September contracts closed above $19. July and later futures made new contract highs today. The dry whey market has proved itself so now it is up to cheese prices to prove themselves.
This may be the beginning of a higher trend. However, one must be cautious as this has been the thinking numerous times only to have limited upside potential. Class IV futures did share the same sentiment as the increase of butter was offset by the decrease of nonfat dry milk.
The November Class I price was announced today at $19.75. This is an increase of $0.28 from October and down $4.34 from November 2022. The USDA will release the September Milk Production report tomorrow.
I estimate milk production to be 0.4% below a year ago. I am not sure what cow numbers did during the month. In August, there was some heavy culling, but cow numbers did not decrease from the previous month. I am going to guess cow numbers might be down from August by 2,000 head, but it is just a guess.
AVERAGE CLASS III PRICES
| 3 Month: | $17.99 |
| 6 Month: | $18.36 |
| 9 Month: | $18.52 |
| 12 Month: | $18.65 |
CHEESE
There are mixed reports of cheese demand from various manufacturers. Demand for pizza cheeses has been good, but there is indication that is it not as good as expected. Some plants report a slight build of inventory over the past month. The CWT export assistance program accepted requests for export assistance on contracts of 355,000 pounds (161 metric tons) of American-type cheese.
So far this year, the program has assisted member cooperatives that have contracts to sell 36.8 million pounds of American-type cheeses and 7.2 million pounds of cream cheese in export markets according to the report from USDA's Dairy Market News.
BUTTER
Some butter processors report having very limited volumes of butter in inventory after a recent surge in demand. Strong demand continues, which is providing support to the spot market. Cream is available for churning in general with some plants reaching out to purchase extra cream over and above contracted supply to meet demand.
OUTSIDE MARKETS SUMMARY
December corn closed up 3 cents per bushel at $4.92, November soybeans closed up 14.25 cents at $13.11 and December soybean meal closed up $14 per ton at $413.80. December Chicago wheat closed up 9.75 cents at $5.8025.
December live cattle closed up $0.33 at $187.20. November crude oil is up $1.57 per barrel at $88.23. The Dow Jones Industrial Average is down 333 points at 33,665 with the NASDAQ down 219 points at 13,314.
