MILK
It seems cheese prices may have reached their highs for the year. Prices may have a difficult time recovering from the recent weakness. This has put significant pressure on milk futures. Last week, the October price was above $24.00 with the close today nearly $1.00 below. Some of the pressure may have stemmed from the August Milk Production report showing higher-than-expected milk production. This signaled that the milk supply should remain sufficient for bottling and manufacturing. There were 11 of the top 24 states showing production declines in August. The largest decrease on a percentage basis was in New Mexico with a decline of 11.3%. Arizona declined 6.5% with Vermont down 5.1% and Virginia down 4.2%. The rest of the states showed declines of less than 4.0%. South Dakota showed the largest gain of 8.5% followed by Texas with an increase of 7.8% and Kansas up 6.6% the other states showed gains of 2.0% or less.
AVERAGE CLASS III PRICES
| 3 Month: | $23.09 |
| 6 Month: | $21.79 |
| 9 Month: | $20.93 |
| 12 Month: | $20.52 |
CHEESE
The block cheese price has eliminated nearly all of the gains of the past three weeks. The top may have been established for the year, but the price certainly can rebound to some extent as holiday buying increases and orders need to be filled. Barrels may be more concerning as there seems to be a price void under the market. Buyers have stepped away for the time being, letting the price fall. The supply of barrels is reportedly loser than it had been.
BUTTER
The butter price has now declined to the lowest level it has been since April 11. Manufacturers want to minimize inventory build and are willing to move supply as it may not be beneficial to hold supply for a higher price that may not materialize. It will be difficult, if not impossible, to regain the losses of the past two weeks.
OUTSIDE MARKETS SUMMARY
December corn closed down 1.75 cents per bushel at $4.1175, November soybeans closed up 3.00 cents at $10.4225 and December soybean meal closed down $2.80 per ton at $325.90. December Chicago wheat closed down 4.50 cents at $5.7800. December live cattle closed up $0.58 at $184.40. November crude oil is up 1.19 per barrel at $71.56. The Dow Jones Industrial Average is up 84 points at 42,208 with the NASDAQ up 100 points at 18,075.
