MILK
The trading volume was very light and did not provide a good indication of market sentiment. However, it is always good to see futures closing higher even if just by a small amount. Prices are not expected to do much through the end of the year and likely for a period in early 2024. There is not likely to be a huge shift in cow numbers or milk production.
The goal is to balance rations and keep cows comfortable to optimize milk production. Milk components are continuing to improve, which is increasing the amount of cream available and improving cheese yields.
There have been more reports of the shortage of half-pint milk cartons commonly used in schools and hindering some demand as some schools have adjusted. Demand for all classes of milk is steady to stronger but is readily met with a sufficient milk supply. Some plants indicate spot milk supply is more available than it has been, keeping needs supplied and buyers of product unconcerned over supply.
AVERAGE CLASS III PRICES
| 3 Month: | $16.48 |
| 6 Month: | $17.14 |
| 9 Month: | $17.58 |
| 12 Month: | $17.87 |
CHEESE
Prices may continue in the mode of one category increasing while the other declines and then switch the following day. This will keep prices in a range with limited upside potential. There is sufficient supply for demand with inventory near the level it was a year ago. Demand is not expected to increase sufficiently to reduce inventory through the end of the year.
BUTTER
Buyers were nowhere to be found despite the significant price decline. With no buyers showing up even with the weakness, it gives the impression they are standing back and will let the price fall further. Orders are filled through the end of the year with some contracts already made for the first quarter of next year. Cream supply will again increase after the holidays which will increase churning capacity and butter output.
OUTSIDE MARKETS SUMMARY
March corn closed down 4 cents per bushel at $4.8150, January soybeans closed up 32 cents at $13.3600 and January soybean meal closed up $8.50 per ton at $413.20. March Chicago wheat closed down 22.25 cents at $6.0950. February live cattle closed up $2.18 at $167.90. January crude oil is up $0.15 per barrel at $71.38. The Dow Jones Industrial Average is up 157 points at 36,405 while the NASDAQ is up 29 points at 14,432.
