MILK
Class III milk futures showed strength Tuesday with contracts through July posting double-digit gains. The February contract closed above $18 again, a price not seen since Oct. 26. Cheese prices showed minor gains, but the strength stemmed from the increase of dry whey.
A new farm bill will not be passed in time with an extension likely. On Saturday, House Speaker Mike Johnson introduced a continuing budget resolution to avoid a Nov. 17 government shutdown and the provision to extend the 2018 Farm Bill for one year. This certainly is not a surprise. Congress is expected to consider the temporary funding bill this week. Some federal agencies would have funding extended through January while others would be funded through February.
The South Dairy Trade report was released today. Dairy products moved through ports in Argentina from Sept. 16-20. The report showed 9,393.33 tons moved to 31 destinations. Whole milk powder decreased 5.9% to $3,218.60 per ton or $1.46 per pound. Skim milk powder increased 0.1% to $3,103.451 per ton or $1.41 per pound. Semi-hard cheese decreased 5.3% to $4,255.32 per ton or $1.93 per pound. Harch cheese decreased 3.2% from the previous period to $5,905.53 per ton or $2.68 per pound. Butter increased 0.8% to $4,452.06 per ton or $2.20 per pound.
There were 9,401.36 tons of dairy products moved through ports in Uruguay to 29 destinations for Oct. 16-31. Whole milk powder decreased 1.1% to $3,237.67 per ton or $1.47 per pound. Semi-hard cheese increased 3.3% to $5,050.57 per ton or $2.29 per pound from the previous period. Hard cheese increased 8% percent to $6,449.42 per ton or $2.93 per pound. Butter decreased 2.7% to $4,516.74 per ton or $2.05 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $17.43 |
| 6 Month: | $17.81 |
| 9 Month: | $18.02 |
| 12 Month: | $18.17 |
CHEESE
The increase in cheese prices did not trigger the strong buying interest in Class III future. It was the strength of dry whey which provided support. It was surprising that buying interest was as strong as it was as traders have been cautious due to higher prices being short-lived. Buyers have not been concerned over supply and likely have not changed that thinking.
BUTTER
Price is recovering from falling too far. Buyers are taking advantage of lower prices to pick up some supply to fill orders. Upside price potential is limited as sellers continue to move production to the market as quickly as possible. Manufacturers have little desire to hold product and pay for storage.
OUTSIDE MARKETS SUMMARY
December corn closed up 1 cent per bushel at $4.7825, January soybeans closed up 7.25 cents at $13.8975 and December soybean meal closed up $4.50 per ton at $473.60. December Chicago wheat closed down 7 cents at $5.7200. December live cattle closed up $0.93 at $175.85. December crude oil is unchanged at $78.26 per barrel. The Dow Jones Industrial Average is up 490 points at 34,828 with the NASDAQ up 327 points at 14,094
