MILK
Class III futures moved higher before spot trading took place in anticipation that the barrel price might show further strength. After spot trading, futures slipped back from their highs as traders were uncertain of the implications of the weakness of barrels indicated. The pressure was short-lived as futures moved higher through the afternoon. Milk production is steady to lower depending on the location. Milk production may be near the low of the year but may not turn higher very quickly. Fluid milk demand is higher limiting the amount available for manufacturing. Milk component levels are slightly higher than they were a year ago and should improve as the weather turns seasonal in time. However, milk production may not exceed year-earlier levels. The October Class I advanced price is $23.17, up $1.57 from September and $3.70 above October 2023. The USDA will release the August Milk Production report after the close on Friday. I estimate milk production to be 0.5% below a year ago and cow numbers to be 3,000 head higher than in July.
AVERAGE CLASS III PRICES
| 3 Month: | $23.49 |
| 6 Month: | $22.14 |
| 9 Month: | $21.19 |
| 12 Month: | $20.72 |
CHEESE
Dairy Market News reports that barrel cheese manufacturers say they have recently been able to offer spot loads to customers above contracted supplies. Yet, the barrel price has increased to a record high this week. Maybe the recent strong gain has been due to emotion with buyers leapfrogging over each other in their attempt to purchase supply before prices increase. This created a bidding war and higher prices.
BUTTER
The weakness of butter pushed the price below $3.00 for the first time since May. The market has been strong and trending higher all year. In the past two years, the price reached its peak in the first week of October. However, it should not be surprising that it reached its peak earlier with buyers having prepared for potential tightness earlier and now having sufficient purchased reducing the need to be aggressive.
OUTSIDE MARKETS SUMMARY
December corn closed down 7.00 cents per bushel at $4.0575, November soybeans closed down 0.75 cent at $10.1325 and December soybean meal closed up $.20 per ton at $321.60. December Chicago wheat closed down 10.25 cents at $5.6550. December live cattle closed up $1.28 at $181.13. November crude oil is up $1.25 per barrel at $71.13. The Dow Jones Industrial Average is up 522 points at 42,025 with the NASDAQ up 441 points at 18,014.
