MILK
Class III futures finally closed higher in some contracts with December and January posting double-digit gains. After the market settled for the day, continued afternoon trading on Wednesday posted greater gains, likely setting the stage for stronger trade tonight. Class IV futures were nearly a mirror of yesterday's price with most contracts closing unchanged despite another drop in butter price.
Milk production is slowly improving with milk components increasing as well. This allows more milk for processing with higher components, improving cheese yield and the supply of cream. USDA will release the World Agricultural Supply and Demand report on Thursday which will provide USDA's estimates for milk production, milk prices and dairy product prices for this year and next. This is not a market-moving report. It may have more impact on grain prices and the cost of feed.
AVERAGE CLASS III PRICES
| 3 Month: | $17.17 |
| 6 Month: | $17.54 |
| 9 Month: | $17.81 |
| 12 Month: | $18 |
CHEESE
The spot markets are about as volatile as other commodity futures markets. It depends on who is in the spot market during the period and what they wish to accomplish. Generally, there are buyers and sellers doing business on a more calculated basis, but lately buyers and sellers are stepping in and out of spot trading more quickly, creating more price swings. Spot milk prices have declined a bit with prices reported at class or $1 higher. Plants are planning to handle milk demands over the Thanksgiving holiday period.
BUTTER
Cream supply is becoming more available, allowing for increased butter production and supply availability. Butter price has plummeted $0.31 so far this week, moving the price to its lowest level since Sept. 18. The price decline may slow as buyers might be willing to step back into the market to purchase for the holiday season. However, weakness will still prevail as the market corrects itself from the strong gain in September and early October.
OUTSIDE MARKETS SUMMARY
December corn closed up 7.50 cents per bushel at $4.7600. January soybeans closed up 3.75 cents at $13.6575 and December soybean meal closed up $2.40 per ton at $449.80. December Chicago wheat closed up 22 cents at $5.9225. December live cattle closed up $0.63 at $179.40. December crude oil is down $1.75 per barrel at $75.62. The Dow Jones Industrial Average is down 40 points at 34,112 with the NASDAQ up 11 points at 13,650.
