MILK
Milk futures reversed course during the second half of the week with nearby Class III contracts closing at the highest level since January 10. Class IV futures showed exceptional gains with all contracts through the end of the year pushing to new contract highs. Class IV futures continue to outpace Class III futures widening the spread between the two markets. Underlying fundamentals have not changed with the December Milk Production and Livestock Slaughter reports being bearish. But short covering triggered strong buying interest as traders holding short positions were pushed to get out of the market. This may be temporary unless underlying cash continues to find support. One correlation to keep in mind is that corn prices remain weak which generally has a strong correlation to milk prices.
AVERAGE CLASS III PRICES
| 3 Month: | $15.93 |
| 6 Month: | $16.63 |
| 9 Month: | $17.16 |
| 12 Month: | $17.41 |
CHEESE
For the week, blocks increased by 9.25 cents with 19 loads traded. Price closed at the highest level since January 16. Barrels gained 0.25 cent with 12 loads traded. Dry whey gained 1.50 cents with three loads traded. Blocks held steady earlier in the week and then resumed to uptrend. Class III milk futures showed strong gains mostly from short covering. Overall, traders are cautious of the price gains. Fundamentals have not turned bullish with supplies of cheese readily available.
BUTTER
Butter price exploded this week with a gain of 21.50 cents with only two loads traded. This gain has been exceptional and quite a surprise. The bullishness of the December Cold Storage report might have had some influence along with buyers needing to purchase butter while sellers held back. Grade A nonfat dry milk price gained 4.50 cents with 10 loads traded. Spot price broke above the trading range to the highest level since November 9, 2023.
OUTSIDE MARKETS SUMMARY
March corn closed down 5.50 cents per bushel at $4.4625, March soybeans closed down 13.75 cents at $12.0925 and March soybean meal closed down $9.20 per ton at $349.00. March Chicago wheat closed down 12.00 cents at $6.0025. April live cattle closed up $0.98 at $181.68. March crude oil is up $0.83 per barrel at $78.19. The Dow Jones Industrial Average is up 60 points at 38,109 while the NASDAQ is down 55 points at 15,455.
