MILK
Class III milk futures weakened after spot prices traded higher. Traders remain negative and see little reason for cheese prices to increase very much. Class IV futures were mostly higher following the stronger butter and nonfat dry milk prices. Tomorrow is the last trading day for December futures and options with the Federal Order class prices announced on Thursday. This was shifted back one day due to the holiday weekend. The Global Dairy Trade auction took place today with the trade weighted average up 1.2%. There were 26,206 metric tons sold at an average price of $3,363 per metric ton. Anhydrous milk fat increased 0.2% to $5,595 per metric ton or 42.54 per pound. Butter increased 2.1% to $5,514 per metric ton or 42.50 per pound. Buttermilk powder slipped 0.1% to $2,384 per metric ton or $1.08 per pound. Cheddar cheese price decreased 2.4% to $4,165 per metric ton or $1.89 per pound. Lactose declined 5.0% to $753 per metric ton or $0.34 per pound. Mozzarella remained steady with the previous event at 43,960 per metric ton or $1.80 per pound. Skim milk powder declined 0.9% to $2,613 per metric ton or $1.19 per pound. Whole milk powder gained 2.5% to $3,290 per metric ton or 41.49 per pound. FSA has yet to release the average soybean meal price for November. This is needed to calculate the income over feed price for the Dairy Margin Coverage program.
AVERAGE CLASS III PRICES
| 3 Month: | $15.71 |
| 6 Month: | $16.38 |
| 9 Month: | $17.02 |
| 12 Month: | $17.39 |
CHEESE
The strength of cheese price to begin the year and early in the week was welcomed. However, traders are not convinced prices will continue higher for an extended duration. There remained a large number of unfilled bids for barrels at the end of spot trading like that had been last week. There is much interest in buying but the buyers have not been very aggressive. Manufacturers have sufficient supply and want to move product rather than hold back even though there seems to be strong buyer interest.
BUTTER
Price is back up near the level it was a month ago. It will be interesting to see whether buying interest will be maintained through the initial period of the first quarter. Churning is active which is providing more supply to the market. Inventory has been building and will build through much of the first half of the year. Cream supply with increase with milk being processed for the school systems.
OUTSIDE MARKETS SUMMARY
March corn closed down 7.50 cents per bushel at $4.6375, March soybeans closed down 24.50 cents at $12.7350 and March soybean meal closed down $6.50 per ton at $379.50. March Chicago wheat closed down 21.25 cents at $6.0675. February live cattle closed up $3.43 at $171.93. February crude oil is down $1.11 per barrel at $70.54. The Dow Jones Industrial Average is up 26 points at 37,715 with the NASDAQ is down 245 points at 14,766.
