MILK
It has been an incredible week with Class III futures posting strong gains. Futures retraced today but the price retracement was minor relative to the gains for the week. The September and October contracts moved above $22.00 with October closing the week above that level. Milk production continued to tighten along seasonal lines, but it did not show the possibility of a shortage. However, the perception of traders was for a tightening of supply that could reduce availability when demand increases. Class IV futures posted double-digit gains with some nearing contract highs due to the strength of the butter price. Higher milk prices may continue to reduce the slaughter pace and result in more dairy cattle remaining in the herd. Higher milk prices will increase the desire to purchase replacements despite the higher cattle prices.
AVERAGE CLASS III PRICES
| 3 Month: | $21.49 |
| 6 Month: | $20.84 |
| 9 Month: | $20.03 |
| 12 Month: | $19.63 |
CHEESE
For the week, blocks increased 14.25 cents with 21 loads traded. Barrels increased 25 cents with eight loads traded. The block price closed at the highest price since March 27, 20023. The barrel price closed at the highest level since June 9, 2022. The block cheese price broke out of the trading range it had been in since early May. Barrels posted strong gains fueled by tighter supplies and greater buying interest in preparation for Fall and holiday demand.
BUTTER
Butter had an incredible week with a record amount of load traded. The price increased 8.25 cents with 103 loads changing hands. Surprisingly, the price did not increase much further due to buyers turning aggressive. Sellers continue to offer butter rather than speculate and hold for higher prices. The higher inventory level leaves the industry confident the butter supply will remain readily available.
OUTSIDE MARKETS SUMMARY
December corn closed down 4.50 cents per bushel at $3.9250, November soybeans closed down 11.50 cents at $9.5700 and December soybean meal closed down $5.60 per ton at $302.10. September Chicago wheat closed up 1.75 cents at $5.3000. October live cattle closed down $2.45 at $178.30. September crude oil is down $1.59 per barrel at $76.57. The Dow Jones Industrial Average is up 97 points at 40,660 with the NASDAQ up 37 points at 17,632.
