MILK
Traders began liquidating some positions ahead of spot trading as there was concern over how prices would be able to move in the near term. Even though cheese prices increased, the selling pressure on the market did not change. Last week's strength was met with resistance and the market needs to prove itself before traders become aggressive buyers. Milk output below year-ago levels and lower cow numbers will not change the market fundamentals quickly. However, other outside factors could influence the strength of milk prices. The FOMC rate decision on interest rates will be released at 1 p.m. CDT Wednesday. There is a 59% chance they will cut interest rates by a half point. This would not impact dairy demand immediately, but it could have a longer-term positive impact.
AVERAGE CLASS III PRICES
| 3 Month: | $23.32 |
| 6 Month: | $21.98 |
| 9 Month: | $21.04 |
| 12 Month: | $20.61 |
CHEESE
Cheese buyers remained aggressive and wanted to purchase cheese. The buyers are not willing to step back and wait for a price decline. Price declines have been limited over the past weeks. Buyers will purchase now and pick up supply instead of having to chase the market higher if supply tightens further.
BUTTER
The butter price may have reached a threshold and will find a level where buyers and sellers are comfortable doing business. The price has been slowly increasing all year and may have difficulty exceeding the previous high. Time will tell as demand improves through the rest of the year.
OUTSIDE MARKETS SUMMARY
December corn closed down 2.50 cents per bushel at $4.1075, November soybeans closed down 1.75 cents at $10.0450 and December soybean meal closed up $.90 per ton at $323.80. December Chicago wheat closed down 16.25 cents at $5.7850. October live cattle closed down $0.43 at $177.23. October crude oil is up $1.88 per barrel at $70.53. The Dow Jones Industrial Average is up 228 points at 41,622 with the NASDAQ down 92 points at 17,592.
