MILK
Class III futures closed steady to lower across the board. Even though the decline of barrel cheese prices will have more impact on nearby months, later months also exhibited pressure. There is no solid support under the market as traders again saw that any price increase of underlying cash is short-lived. That is going to be a difficult pattern to break as we move through the end of the year.
Class IV futures closed steady to higher influenced by the gain of butter price. The market is in a give-and-take mode depending on the fluctuation of underlying prices. However, the overall attitude is bearish as demand is not expected to increase any time soon to reduce supply and tighten the market. The November Federal Order class prices will be announced Wednesday with the trade anticipating a Class III price of $17.13 and a Class IV price of $20.65.
AVERAGE CLASS III PRICES
| 3 Month: | $16.49 |
| 6 Month: | $17.10 |
| 9 Month: | $17.54 |
| 12 Month: | $17.83 |
CHEESE
Cheese prices seem to have nowhere to go. Barrel price moved to a new low since the last high was reached Oct. 23. Price is back to the lowest level since July and hopefully will find a level where it will stabilize. However, there is some concern that the price could reach back to the July low. The market is trying to find a level at which demand may improve or milk production will be curtailed. Hopefully, the earlier scenario is true.
BUTTER
Price made a nice bounce with buyer interest supporting the market. However, once the buying interest is satisfied, the price may fall back again as buyers are not expected to remain aggressive. The market may be trying to establish a bottom and at least trade sideways but it is too early to tell.
OUTSIDE MARKETS SUMMARY
December corn closed down 4 cents per bushel at $4.5150, January soybeans closed up 16.75 cents at $13.4650 and January soybean meal closed down $6.10 per ton at $430.50. March Chicago wheat closed up 11 cents at $5.7200. February live cattle closed up $4 at $172.83. January crude oil is up $1.55 per barrel at $76.41. The Dow Jones Industrial Average is up 84 points at 35,417 with the NASDAQ is up 41 points at 14,282.
