MILK
Milk futures were mixed for the day, which could be considered positive but certainly not a victory. There is little reason for the market to do much of anything different at the present time. The lower prices have resulted in some buyers stepping up a bit to purchase cheese to rebuild aging programs. This may be somewhat earlier than usual. Spot milk this week is reported to average $2.50 under class. It has been a few months since spot milk was available under class. This was expected during this time of year with milk prices likely available below class through the rest of the year. This is not necessarily bearish to the market, but rather what takes place during this time of year. Milk production continues to improve, keeping sufficient milk available to the market.
AVERAGE CLASS III PRICES
| 3 Month: | $16.68 |
| 6 Month: | $17.12 |
| 9 Month: | $17.50 |
| 12 Month: | $17.80 |
CHEESE
Weakness continues to permeate through the cheese market. Much of the cheese that has been contracted for the holidays has been shipped or is in process of being shipped shortly. Buyers will remain less aggressive unless unexpected demand surfaces. Cheese supplies may have increased during October due to increased output because of increased milk production. The October Cold Storage report will be released on Wednesday which will show us whether demand may have kept pace with production or whether inventory of cheese increased.
BUTTER
Price increased for the second consecutive day, but traders remain cautious as upside is expected to be limited. Cream is readily available keeping churns busy. Some plants will curtail production over the holiday leaving cream available at reduced prices to those who want it. Most of the end of the year demand has already been fulfilled with some focus turning to contracting for the first quarter. Inventory in October may be higher than a year ago which if that is the case, inventory may close the year higher than a year ago.
OUTSIDE MARKETS SUMMARY
December corn closed up 0.50 cent per bushel at $4.7000, January soybeans closed up 10.00 cents at $13.7725 and January soybean meal closed down $1.30 per ton at $442.00. March Chicago wheat closed up 12.25 cents at $5.8275. February live cattle closed down $0.58 at $176.08. January crude oil is down $0.03 per barrel at $77.80. The Dow Jones Industrial Average is down 63 points at 35,088 with the NASDAQ down 85 points at 14,200.
