Friday Closing Dairy Market Update - August Butter Production 14.5% Above Year Ago Levels

MILK

Milk prices traded lower once again Friday with double digit losses seen in all nearby contract months. Although firm pressure developed in remaining 2024 and early 2025 contract months, the ability to pull prices well off of session lows at the end of the trading session is seen as a significant improvement. November Class III milk future settled at $21.44 per cwt following at 39 cent per cwt loss at the end of the session. Early trade was seen with prices near 60 cents lower as continued concern about current milk production levels and uncertainty of short-term dairy product demand growth through the next couple of months. Spot October contracts closed at $22.56 per cwt, with a 33 cent per cwt daily loss.

AVERAGE CLASS III PRICES

3 Month:	$21.63
6 Month:	$20.76
9 Month:	$20.28
12 Month:	$20.09

CHEESE

Cash cheese prices continued to tumble lower Friday with block prices falling 6 cents per pound, while barrel cheese prices tumbled 16.5 cents per pound during the morning trading session. This 16.5 cent per pound loss is the largest one-day loss of 2024 and indicates a 70 cent per pound pullback in barrel cheese prices in the last three weeks. Concern of further market pressure and current milk production levels has buyers unwilling to actively buy short- and long-term product with the potential that additional softness may continue to develop through the month of October. With the lower prices, overall trade volume has been very limited with only 4 loads of barrel cheese selling through the week. Traders may continue to focus on upcoming market needs, but prices are going to have to stabilize for a few days in a row before active trade will be reported on the exchange. Even though sharp price losses were seen on the cash exchange market Friday, cheese futures prices were posted more moderate market softness as traders have already factored a portion of the recent losses into the futures trade. Total cheese output (excluding cottage cheese) during August of 2024 was 1.20 billion pounds, This is 1.7% above August 2023 and 0.5% above July 2024. Italian type cheese production totaled 499 million pounds, 3.1% above August 2023 and 0.6% above July 2024. American type cheese production totaled 478 million pounds, 0.3% below August 2023 but 1.8% above July 2024.

BUTTER

Cash butter prices stabilized at the end of the week with prices moving fractionally higher and gaining 0.75 cent per pound. This moved butter prices to $2.6875 per pound. Friday was the most active day of trade on the exchange with 23 loads traded during the session. Weekly trade was considered active with a total of 59 loads of butter traded on the exchange at the generally lower price levels. Even though monthly production reports posted increased production from year ago levels, the focus on lower prices is helping to stimulate some active buying interest that is likely to continue over the near future. In the August Dairy Product production report released Friday afternoon. Butter production was reported at 159 million pounds. This is 14.5% above August 2023 but currently 3.0% below July 2024. The strong year over year production gains is expected to continue to limit long-term buyer interest in the cash and futures markets. Dry milk products (comparisons in percentage with August 2023), Nonfat dry milk, human -- 115 million pounds, up 2.2%. Skim milk powder -- 50.3 million pounds, down 29.4%. In whey products (comparisons in percentage with August 2023)

Dry whey, total -- 65.5 million pounds, down 21.6%. Lactose, human and animal -- 95.6 million pounds, up 3.5%. Whey protein concentrate, total -- 41.5 million pounds, up 1.7%. Ice cream production was reported at 69.3 million gallons for regular hard product. This is 5.9% above year ago levels, and lowfat ice cream production at 38.7million gallons, down 8.8% from last year.

OUTSIDE MARKETS SUMMARY

December corn closed down 3.50 cents per bushel at $4.2475, November soybeans closed down 8.25 cents at $10.3775 and December soybean meal closed down $2.00 per ton at $330.50. December Chicago wheat closed down 13.75 cents at $5.8975. December live cattle closed up $0.60 at $187.00. November crude oil is up .92 per barrel at $74.63. The Dow Jones Industrial Average is up 341.160 points at 42,352.75. NASDAQ is up 219.37 points at 18,137.85.

Friday Midday Dairy Market Update - Cash Cheese Prices Tumble Lower

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	3 1/4 Lower
SOYBEAN MEAL:	$0.80 Lower
LIVE CATTLE:	$0.35 Higher
DOW JONES:	127 Points Higher
NASDAQ:	114 Points Higher
CRUDE OIL:	$1.12 Higher

MIDDAY MARKET UPDATE:

Class III milk futures continue to show additional market weakness, with November contracts leading the complex lower at midday. All nearby contracts are posting double-digit losses, although the November contract is most affected, trading 58 cents per cwt lower at $21.26 per cwt. This first week of October has been challenging at best for the milk complex with November futures falling $2.08 per cwt since Monday. The hope that renewed buyer support will quickly move back into dairy product markets over the next few weeks continues to limit further aggressive selling. Given the current supply of milk and dairy products available, it is likely that prices could remain uneven in a moderate range soon.

The monthly dairy product production report will be released this afternoon. Although this report lags in its overall data and has limited impact on short-term prices, the value of the report will be to measure end of summer production levels with year ago levels. This could help bring some much-needed clarity for the rest of the year and set the tone for price movements in the next couple of weeks for both milk and dairy products.

Cash butter prices increased 0.75 cent per pound to $2.6875, a pound in active trade with a total of 23 loads trading Friday. This pushes the weekly butter trade to 59 loads, which is considered strong for the week and is helping to bring additional movement back into the market. Cheese prices were lower with aggressive 16.5 cent losses redeveloping in the barrel markets while block cheese fell an additional 6 cents per pound. This pushes both block and barrel prices below $2 per pound and is adding even more concern for further market weakness in the coming days.

Friday Morning Dairy Market Update - Cheese Prices Have Not Found a Bottom

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 8 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	6 to 7 Lower

MILK:

The November Class III milk contract suffered the greatest loss on Thursday due to block and barrel cheese prices declining. The greatest losses were seen in the November and December contracts. Holiday demand should support the market as buyers purchase to fill contracts and satisfy orders. Prices falling this rapidly and to the extent they have during this time of year is unusual. Milk production is at the seasonal low but will not rebound very quickly over the next few weeks. The heifer supply is tight, and expansions are put on hold. This will limit milk production growth for next year. The USDA will release the August Dairy Products report this afternoon.

CHEESE:

Spot cheese prices declined, moving blocks down near the $2.00 level. The barrel cheese price showed further weakness. Some had anticipated that the price action on Wednesday may have indicated a price bottom was reached. However, that was short-lived. The barrel price has plummeted by 50.25 cents in a little over two weeks.

BUTTER:

The butter price was stable today during spot trading. However, that does not mean much as there has been no indication of a price bottom. Butter production in August is expected to have been higher than the previous year. The price could bounce from here, but a sustained increase will be difficult to accomplish.

Thursday Closing Dairy Market Update - Butter Price Stability Creates Hope of Market Support

MILK

Milk prices worked lower once again Thursday in nearby contracts, although unlike previous days, firm pressure developed in all nearby market contracts as traders continue to view the current price levels as being slightly unsupported. November contracts led the market lower with prices settling 48 cents per cwt lower at $21.83 per cwt. The overall lack of buyer interest and price stability is not only directly associated to the price softness in dairy prices, but general weakness in other ag commodities Thursday. Very little new fundamental market information is available through the last couple of days, leaving traders to be more heavily influenced by outside markets and concerns that building pressure in stock markets could add adverse implications to the overall economy as a whole through the upcoming months. It is important to remember that a large share of dairy product sales takes place in the last quarter of the year with the focus on holiday and year-end consumer buying needs. Any significant shift in the economy which will impact disposable income for the average consumer is likely to have at least marginal impact on dairy product choices purchased over the coming months. Class IV milk prices also posted moderate pressure, but less market softness was seen in the lightly traded Class IV market than the Class III milk futures, which continue to be the flagship futures product for the dairy complex.

AVERAGE CLASS III PRICES

3 Month:	$21.98
6 Month:	$21.03
9 Month:	$20.48
12 Month:	$20.24

CHEESE

Cash cheese posted further price erosion Thursday with block and barrel prices both slipping. Block cheese prices fell 2 cents per pound, moving to $2.0075 per pound with a total of five loads trading on the exchange market. One additional bid and two offers were still left in the market, indicating that traders are looking for some additional market shifts in the near future. Barrel cheese prices posted the most aggressive pressure with prices falling 3.25 cents per pound as markets closed at $2.12 per pound. No trades developed Thursday with no bids and one uncovered offer. Barrel cheese prices have fallen 2.75 cents per pound through the week, while block prices have fallen 11.25 cents per pound. The focus on weakness in several commodity markets and firm pressure in the milk trade may create additional end of the week pressure in cheese trade.

BUTTER

Cash butter markets created some much-needed stability Thursday morning with active trade developing on the exchange. Sixteen loads of butter sold at a steady price level of $2.68 per pound. There remained six unfilled bids left on the trading floor and one uncovered offer. The indication that additional trade volume swept back into the market on the hint that prices may be at or near market support is creating a sense of hope that follow through buying may develop in not only the butter complex in the near future but could also be seen in other dairy products through the end of the week. There still is expected to be significant trade volume developing over the upcoming weeks, but prices may continue to move in a moderate price range once initial support levels are reached and could stimulate additional interest in not only the cash market but most dairy futures. Nonfat Dry Milk prices and Dry Whey trade also became more active Thursday, although prices were mixed in a narrow range. Nonfat Dry Milk prices slipped an additional 0.75 cent per pound with six loads trading during the session. Dry Whey prices posted the only gains on the dairy exchange during the day with prices increasing 0.5 cent per pound, while four loads traded Thursday.

OUTSIDE MARKETS SUMMARY

December corn closed down 4.25 cents per bushel at $4.2825, November soybeans closed down 10.00 cents at $10.4600 and December soybean meal closed down $7.90 per ton at $332.50. December Chicago wheat closed down 11.75 cents at $6.0350. December live cattle closed down $1.30 at $186.40. November crude oil is up 3.59 per barrel at $73.69. The Dow Jones Industrial Average is down 184.93 points at 42,011.59 and NASDAQ is down 6.64 points at 17,918.48.

Thursday Midday Dairy Market Summary - Butter Prices Stabilize

OUTSIDE MARKETS SUMMARY:

CORN:	1 1/4 Lower
SOYBEANS:	1/2 Lower
SOYBEAN MEAL:	$3.80 Lower
LIVE CATTLE:	$0.67 Lower
DOW JONES:	194 Points Lower
NASDAQ:	14 Points Lower
CRUDE OIL:	$3.54 Higher

MIDDAY MARKET UPDATE:

Market activity has been focused on a strong market pullback in stock prices and an active rally in energy markets Thursday morning. This has brought about some additional uncertainty and volatility in commodity markets. For now, most of the activity has been focused on outside markets and non-commercial interest rather than fundamental market moves in either ag commodities or dairy market segments. Cash butter exchange posted active trade with 16 trades taking place at $2.68 per pound with prices unchanged from midweek levels. At least for a temporary basis, this indicates that traders may be focusing on market stability at current prices. This could signal that butter markets may have hit or may be near to short-term support levels.

Cheese prices continued to erode Thursday with block prices falling 2 cents per pound, while barrel markets led the market lower with a 3.25 cent per pound reduction. Milk futures remain lightly traded through the morning, although November futures are holding the most aggressive losses, trading below $22 per cwt with a 46 cent per cwt loss at midday. A close at or near these levels could weaken short-term support in the market. Despite volatility in outside markets, overall trade in the dairy complex is expected to remain extremely thin, not only on Thursday but through the rest of the week.

Fluid Milk and Cream - Western U.S. Report 40

Handlers in California indicate milk production is weaker. Herd health challenges have contributed to decreases in milk output at the farm level. Some handlers convey preliminary records indicate September 2024 milk production was down from August 2024 milk production. Stakeholders note spot load purchases at flat Class prices. Manufactures note processing capacity is generally available throughout the state. Class I, III, and IV demands are steady. Class II demand is lighter. 

Processors convey milk production in Arizona varies from steady to weaker. Some stakeholders convey spot availability is tight, and manufacturers are looking to secure loads. Some processors indicate strong Class I demand is limiting milk volumes for Class II, III, and IV manufacturers. 

Milk production in New Mexico varies from steady to weaker as well. Stakeholders indicate manufacturers are looking to obtain additional loads of milk. Class I demand is strong and contributing to tighter availability of milk volumes for other Class manufacturing. 

Pacific Northwest handlers convey farm level milk output is steady and meeting anticipated volumes. Demands for all Classes are unchanged. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado is steady. Although processors convey milk volumes have been tighter this year compared to last year, milk volumes are indicated to be in good balance with manufacturing capacities. Demands for all Classes are steady. 

Cream continues to be widely available. Cream demand varies from steady to lighter domestically. However, cream demand for loads shipped to our southern neighbor is stronger. Cream multiples are unchanged. Condensed skim milk is widely available as well. Condensed skim milk demand is mixed. 

Thursday Morning Dairy Market Update - Price Support Remains Elusive

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	5 to 8 Lower
Soybean Meal Futures:	$2 to $4 Lower
Wheat Futures:	1 to 3 Lower

MILK:

Class III futures were mixed overnight with traders uncertain about the direction of underlying cash. Milk futures came under pressure on Wednesday due to the weakness of block cheese and butter. The positive aspect of the market is that Class III contracts in 2025 continue to hold well, with some setting new highs. Class IV futures could not hold up under the weakness of butter. It may be difficult for prices to rebound very much as a large part of the buying for the end-of-year is complete with fill-in buying to continue as orders need to be filled. Milk production is in a holding pattern with output at its seasonal low. Milk production may push above the level of a year ago if the current pattern is maintained. This would not oversupply the market and possibly maintain good prices into 2025. The September Federal Order class prices were announced showing the Class II price at $22.40, up $0.35 from August and $2.42 from a year earlier. The Class III price is $23.34, up $2.68 from August and up $4.95 from September 2023. The Class IV price is $22.29, up $0.71 from the previous month and up $3.20 from September 2023.

CHEESE:

Block cheese declined to its lowest level since August 13. Some anticipated the price finding a bottom earlier in the week. However, yesterday's weakness has traders wondering if the price could fall below $2.00. Demand has not increased to the level at which it is exceeding supply. The supply may not decrease much further compared to a year ago.

BUTTER:

The butter price fell to the lowest level since January 2024. This eliminates nearly the entire gains for the year. It will take some time to recover from the losses and the price will have a difficult time increasing. More cream will be available for churning as ice cream production slows.

Wednesday Closing Dairy Market Update - Butter Prices Lead Dairy Market Lower

MILK

Milk prices continued to show pressure in nearby contracts with October contracts falling another 15 cents per cwt, moving below $23 per cwt at $22.95. The most significant pressure developed in November contracts, which is not surprising given the overall lack of support over the past couple of weeks in dairy product prices. Although there still seems to be hope and expectations that this downturn will find support in the near future, the focus on aggressive upward market movement in the next several weeks seems to be limited. Deferred prices seem to have found some limited support with early 2025 contract holding narrow single digit gains Wednesday. This could help to brighten the outlook for next spring and summer, but the concern surrounding the recent price tumble in dairy product prices still has milk futures generally unsupported.

AVERAGE CLASS III PRICES

3 Month:	$22.22
6 Month:	$21.19
9 Month:	$20.58
12 Month:	$20.31

CHEESE

Cash cheese prices continue to look for support midweek, but so far active price support is unable to develop with block cheedar prices falling another 5.25 cents per pound moving to $2.2275 a pound. Barrel cheese prices did move higher with prices gaining 0.75 cent per pound, but the lack of trades at this price level could limit follow through buyer support over the near future. The ability for both block and barrel prices to remain steady to higher is expected to bring about additional underlying support. It is uncertain just how much activity will be seen the rest of the week with only six loads of blocks selling through the week and four loads of barrel cheese selling. Once prices do find additional market support levels, it is expected that additional trade will develop in all markets.

BUTTER

Cash butter led the dairy complex lower once again Wednesday with prices falling 7 cents per pound, moving to a settlement price on the daily exchange of $2.68 per pound. Four loads of butter sold on the exchange with two additional offers going unfilled. The hope that markets have found support and started to stabilize earlier in the week and during the first couple days of October seem to have been unfounded for now with butter prices falling 12.5 cents per pound so far this week with a total of 20 loads of butter sold over the past three trading sessions. Some additional holiday and end of year buying is still expected to develop, but there tends to be a focus by buyers to allow for prices to find a sense of market support before aggressively stepping in and purchasing. Once price support does develop, it is very possible that prices may start pushing higher relatively quickly over the next couple of weeks. But the current milk production levels may make it hard to quickly regain all of the losses seen over the past few weeks. Nonfat Dry Milk prices posted fractional losses midweek, slipping just 0.25 cent per pound, but moderate activity and interest developed, indicating that there could be some additional but potentially narrow price shifts within the Nonfat Dry Milk market during early October. Dry Whey prices were unchanged in very light trade activity Wednesday.

OUTSIDE MARKETS SUMMARY

December corn closed up 3.50 cents per bushel at $4.3250, November soybeans closed down 1.25 cents at $10.5600 and December soybean meal closed down $7.10 per ton at $340.40. December Chicago wheat closed up 16.25 cents at $6.1525. December live cattle closed up $2.53 at $187.70. November crude oil is up .64 per barrel at $70.47. The Dow Jones Industrial Average is up 68.48 points at 42,217.3 and NASDAQ is up 36.17 at 17,947.58.

Wednesday Midday Dairy Market Summary - Price Pressure Continues

OUTSIDE MARKETS SUMMARY:

CORN:	2 3/4 Higher
SOYBEANS:	4 1/4 Lower
SOYBEAN MEAL:	$5.00 Lower
LIVE CATTLE:	$2.12 Higher
DOW JONES:	3 Points Higher
NASDAQ:	46 Points Higher
CRUDE OIL:	$0.29 Higher

MIDDAY MARKET UPDATE:

On the second day of October trade, essentially where the first trading session of the month ended, with prices focused on continued market softness as traders remained defensive but hopeful that buyer support will soon step back into the complex. Although cash butter and cheese prices are testing 8-month lows, milk prices still remain hovering within the top end of the summer and fall trading range. Nearby Class III milk futures are still above support levels set in September. The ability to keep spot October futures above the $22.50 per cwt benchmark could add long-term support to the entire dairy complex.

Recent hot weather in several dairy producing areas, along with storm damage through the Southeast, associated with Hurricane Helene continue to reduce overall milk production levels through the fall. The cooler weather in the upcoming weeks is expected to improve overall milk production in most areas, allowing for more seasonal production through the end of the year. Year-end and holiday buying activity is still developing, but the recent pullback in cash and futures prices over the last two weeks have allowed some buyers to purchase immediate needs, with additional orders being delayed until prices stabilize. Some purchasing agents are attempting to hit the market bottom for longer-term dairy product market needs.

Cash butter prices fell to $2.68 per pound following a 7 cent per pound reduction with four loads reported traded on the exchange. Cheese prices were mixed with block cheese prices falling an additional 5.25 cents per pound to $2.0275, while barrel cheese prices increased fractionally by 0.75 cent per pound to $2.1525 per pound. Limited activity developed in cheese trade indicates that the amount of product being traded at these price levels may be minimal at best.

Wednesday Morning Dairy Market Update - Uncertainty if Butter and Cheese Have Found Support

OPENING CALLS:

Class III Milk Futures:	4 to 8 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 4 Higher
Soybean Futures:	Mixed
Soybean Meal Futures:	$6 to $8 Lower
Wheat Futures:	4 to 6 Higher

MILK:

It is positive to see Class III contracts in 2025 remaining supported with March and later contracts making new highs. Some selling pressure was seen overnight as traders are uncertain whether buyers will turn more aggressive at the lower prices. Spot butter and cheese prices are searching for support with buyers still not very anxious about the lack of supply through the end of the year. The low prices should stimulate buying interest, but it may not develop rapidly. Harvest is progressing rapidly in the Corn Belt and weather has improved cow comfort. As of Tuesday, there is no Farm Bill, but it should not impact the dairy industry unless nothing is done by January 1. The lawmakers vow they will not extend the previous bill, but are determined to pass a new bill by the beginning of 2025. Federal Order reform may have a greater impact on the dairy industry.

CHEESE:

The barrel cheese price did not see the pressures it has seen in the past two weeks, but it did decline on Tuesday. It is uncertain whether cheese prices have found support. The strength of block cheese on Monday was short-lived with the downtrend resuming on Tuesday possibly indicating further price weakness.

BUTTER:

The butter price decline on Tuesday took back much of what was gained on Monday. With butter inventory higher than a year ago and churning active, buyers see no need to be concerned over supply through the end of the year.

Tuesday Closing Dairy Market Update - Additional Market Pressure Develops

MILK

Milk prices eroded Tuesday as traders stepped into the month of October and posted the first day of trade in the last quarter of 2024. The underlying softness in cash dairy products and lack of overall support was focused specifically on late 2024 contract months with October contracts closing at $23.09 per cwt falling 22 cents, while November markets led the market lower with a 26 cent per cwt loss, closing at $22.62 per cwt. Light to moderate buying slowly developed in early 2025 contract months with prices increasing 4 to 17 cents per cwt as trades appear to feel the current downturn in the market is likely relatively short-lived as very few changes have been seen in fundamental demand or overall long-term supply issues of milk. The current hot weather through the southwest and hurricane impact across the southeast will continue to limit and disrupt overall milk supplies over the short term, but seasonal production patterns are expected to continue to develop over the next several weeks. Class IV milk prices were mixed with most contracts posting narrow single-digit price moves Tuesday. The current push lower in dairy product prices is limiting buyer support at the moment, but the overall market pattern and demand structure of the complex have not changed in the last couple of weeks even though prices have significantly adjusted lower.

AVERAGE CLASS III PRICES

3 Month:	$23.01
6 Month:	$21.87
9 Month:	$21.08
12 Month:	$20.67

CHEESE

Cash cheese prices shifted lower Tuesday as continued pressure developed on the first trading day of October. Barrel cheese prices were lightly traded with two loads selling on the exchange, falling 0.25 cent per pound. This moved barrel cheese prices to $2.145 per pound. Three bids and one offer were still left on the table, indicating there continues to be a wide price shift between offers and bids in this most recent downward-moving market. Barrel cheese prices have fallen 54 cents per pound from the highs seen two weeks ago, with very little indication from market trends that buyer support is starting to develop just yet. Block cheese prices posted the most aggressive losses on the cheese exchange with prices falling to $2.08 per pound after a 4 cent per pound loss. With three loads of block cheese selling, traders will closely monitor market activity over the coming days and weeks. Traditionally, additional support is likely to be seen over the next couple of weeks, but for now, many commercial buyers still do have time to fill orders and given the softness over the last two weeks, many are willing to wait until prices stabilize before stepping in to aggressively fill long term orders.

BUTTER

Cash butter reverted back to the downward trend seen last week with prices falling 5.5 cents per pound despite no additional trades reported on the exchange Tuesday. End of the month positioning seemed to be the main focus of higher prices Monday, but the continued shift toward lower prices returned Tuesday. This limited support may continue to put additional long-term pressure on not only the butter complex but all dairy products over the next couple of weeks. Prices closed at $2.75 per pound, and still remain 2 cents above last week's lows, but the concern that limited outside support may continue could keep prices from aggressively moving higher in the coming months ahead of seasonal buying patterns. Currently, cash butter prices are trading 59 cents below year-ago levels. This may continue to lag seasonal market direction in the upcoming weeks and could also heavily impact long-term price moves going into 2025.

OUTSIDE MARKETS SUMMARY

December corn closed up 4.25 cents per bushel at $4.29, November soybeans closed up .25 cent at $10.5725 and December soybean meal closed up $5.90 per ton at $347.50. December Chicago wheat closed up 15.00 cents at $5.99. December live cattle closed up $0.38 at $185.18. November crude oil is up 2.00 per barrel at $70.17. The Dow Jones Industrial Average is down 58.23 points at 42,275.63 and NASDAQ is down 219.28 per ounce at 17,966.20.

Tuesday Midday Dairy Market Summary - Prices Continue Lower

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	3/4 Lower
SOYBEAN MEAL:	$6.80 Higher
LIVE CATTLE:	$1.25 Higher
DOW JONES:	181 Points Lower
NASDAQ:	301 Points Higher
CRUDE OIL:	$2.83 Higher

MIDDAY MARKET UPDATE:

The hope that the month of October could bring about a "new leaf" and a sense of market stability in the dairy complex has been unfounded during morning trade. There has been a firm downward pressure seen in milk futures as well as continued price pressure across most cash dairy product markets. October and November Class III milk futures have led the complex lower, moving 24 and 33 cents per cwt lower midmorning Tuesday. The concern that overall price levels have not yet reached support levels is causing many traders to remain very comfortable on the sidelines for the time being. Cheese and butter prices on the daily cash exchange market continue to erode, with butter prices falling an additional 5.5 cents per pound, moving to $2.75 per pound. Block cheese prices led the market lower, falling an additional 4 cents per pound, moving prices to $2.08 a pound. Barrel cheese fell fractionally, slipping just 0.25 cents per pound and holding a strong premium to the block market. There still remains a focus on potential and expected buyer support through the end of the year. Although, given the current buyer interest, the entire dairy market may remain generally soft over the near future.

Tuesday Morning Dairy Market Update - Traders Turn Friendly on the Market

OPENING CALLS:

Class III Milk Futures:	5 to 10 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	3 to 5 Lower
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	2 to 3 Higher

MILK:

The large decline in the barrel cheese price was disheartening, but traders seemed to think this may be the bottom. Class III milk futures increased substantially with traders likely short covering on the anticipation that the market is overdone to the downside. Traders may be willing to step in and take a chance that cash prices will rebound this week. The Agricultural Prices report showed lower grain and hay prices, but a higher All-Milk price. This resulted in an August income over feed price of $13.72. This is the highest income over feed price since the MPP program began in 2015 which then became the DMC program.

CHEESE:

The 15-cent decline in the barrel cheese price was the largest one-day decline since November 16, 2020. The barrel price has nearly fallen to the level of blocks. It would seem the decline has been overdone, providing an opportunity for buyers to increase their ownership of supply for increasing demand through the end of the year. Barrels finally saw loads traded, providing some hope of a price bottom.

BUTTER:

Buyers took advantage of the lower price and turned more aggressive. Sellers did not step back but sold butter as the price increased. They needed to move some butter and were unwilling to speculate on how aggressive the buyers would be. The upside price potential may be limited.