MILK
One must wonder whether cheese prices are low enough to stimulate buying interest for aging programs or just have some on hand for fill-in buying over the next month. That may take place but it is not expected to improve prices very much in the near term.
Traders remain bearish and it may take a monumental effort to overcome the negativity. It will also take an increase in demand or a decrease in milk production to tighten supply. That may not happen for the next few months as the beginning of the year is a time of slower demand. Milk production will continue to increase seasonally as cows settle in for the winter with improved feed consumption. Tomorrow is the last day to trade November futures and options with the November Federal Order prices to be announced on Wednesday.
AVERAGE CLASS III PRICES
| 3 Month: | $16.62 |
| 6 Month: | $17.01 |
| 9 Month: | $17.43 |
| 12 Month: | $17.74 |
CHEESE
The 14-cent spread between blocks and barrels is not an indication of market strength or weakness. The spread between the two is somewhat meaningless as each category runs on its own fundamentals. Cheese supply is sufficient for demand with most of the needs for the holiday season shipped or ready to be shipped leaving buyers complacent for the time being. Prices may continue to chop with no direction.
BUTTER
Price may remain sideways for a period as supply is sufficient and churning active. Butter futures are mostly in line with cash. December shows a little premium while later contracts show a slight discount. Price might move back near the range it remained in for the first half of the year before it finds some stability.
OUTSIDE MARKETS SUMMARY
December corn closed down 7.75 cents per bushel at $4.5550, January soybeans closed down 1 cent at $13.2975 and January soybean meal closed up $2.50 per ton at $436.60. March Chicago wheat closed down 16.25 cents at $5.61. February live cattle closed down $2.15 at $168.83. January crude oil is down $0.68 per barrel at $74.86. The Dow Jones Industrial Average is down 57 points at 35,333 with the NASDAQ down 10 points at 14,241.
