MILK
The decline of Class III futures Thursday nearly eliminated what was gained over the past two days. Traders surprisingly bought into milk futures on the strength of cheese prices knowing full well that the pattern of price increases has been short-lived. It seems as if they anticipated this time was going to be different and higher prices would unfold. However, the pattern is intact, and the decline of cheese and dry whey rippled through the market, sending traders scrambling to get out of positions or to sell the market. This pattern is expected to continue throughout the month or possibly longer. Milk supply needs to tighten, demand needs to increase or both, which may not take place anytime soon.
USDA will release the World Agricultural Supply and Demand report on Friday to provide estimates of milk production this year and next year as well as price estimates for milk and dairy products.
AVERAGE CLASS III PRICES
| 3 Month: | $16.56 |
| 6 Month: | $17.16 |
| 9 Month: | $17.59 |
| 12 Month: | $17.87 |
CHEESE
Once the immediate needs of buyers were satisfied, they stepped back with sellers having to lower prices to sell product. With the weakness today, buyers may hold back tomorrow again. There may be some slight follow-through pressure on the market overnight as those who did not see the market today may decide to liquidate. Fill-in buying for immediate orders being placed may continue to take place with regular demand also needing to be filled. This will keep the market choppy.
BUTTER
Sellers do not seem in a hurry to move supply or reduce prices to accomplish that task. Butter production has slowed a bit as production of Class II products for the holidays is utilizing greater volumes of cream. Some butter plants are selling some cream due to good demand and prices. This leaves plants with less need to sell butter aggressively.
OUTSIDE MARKETS SUMMARY
March corn closed up 3.75 cents per bushel at $4.8800, January soybeans closed up 16.25 cents at $13.1175 and January soybean meal closed down $1.70 per ton at $406.80. March Chicago wheat closed up 8.75 cents at $6.4225. February live cattle closed down $1.03 at $162.53. January crude oil is up $0.19 per barrel at $69.57. The Dow Jones Industrial Average is up 63 points at 36,117 with the NASDAQ up 193 points at 14,340.
