MILK
Traders anticipated higher cheese prices this morning, but after they materialized pressure was put on Class III futures. The market had been overdone to the upside earlier this week and now it is correcting. The close was not very negative, but continued trading after futures were settled for the day showed substantial pressure with the November contract down as much as 42 cents. Further pressure may be seen during overnight trade. Class IV futures showed some pressure even though the butter price remained steady and nonfat dry milk increased slightly. The level of market volatility will remain high. Milk production is reportedly lighter, but the declines are less pronounced. Some areas report milk production is beginning to stabilize. Demand for Class I price is strong, reducing the milk available for manufacturing. The USDA will release the World Agricultural Supply and Demand report on Thursday. The report will impact the grain markets as adjustments are made to the supply and demand tables. The report contains the estimates for milk production, milk prices, and dairy product prices for this year and 2025.
AVERAGE CLASS III PRICES
| 3 Month: | $23.41 |
| 6 Month: | $22.24 |
| 9 Month: | $21.24 |
| 12 Month: | $20.75 |
CHEESE
Cheese demand is reported as steady to strong. Demand is picking up and cheese plants are trying to remain ahead of the market by processing as much milk as possible. There are reports that milk available for manufacturing has been declining since Labor Day as strong demand for fluid milk is pulling heavily on supplies. Spot milk prices are increasing at $1.00 to $2.50 over class. Some plants are actively pursuing this milk as they need to keep ahead of their orders. Spot milk prices are expected to increase further during September.
BUTTER
Butter manufacturers have been able to acquire extra cream supply recently as the Labor Day weekend allowed for an increase in the supply of cream. This may be short-lived as other Class III products are back to full production. Butter plants want to keep production strong as they prepare for stronger demand over the next two months.
OUTSIDE MARKETS SUMMARY
December corn closed up 0.50 cent per bushel at $4.0475, November soybeans closed up 3.25 cents at $10.0050 and December soybean meal closed up $2.50 per ton at $320.00. December Chicago wheat closed up 5.00 cents at $5.7925. October live cattle closed up $0.63 at $176.95. October crude oil is up $1.56 per barrel at $67.31. The Dow Jones Industrial Average is up 125 points at 40,862 with the NASDAQ up 370 points at 17,396.
