MILK
It was a positive week for Class III futures despite lower prices today. The November and December contracts closed the week above $21.00. The January and February contracts closed above $20.00. Some contracts in 2025 closed higher at the end of the day. Cheese buyers became more aggressive this week with barrels posting a stronger gain inverting the market. Traders turned somewhat bullish as the underlying cash performed much better than it had over the past month. Increased buying interest was evident with buyers taking advantage of the lower prices. The gain may be limited as milk production remains steady and is expected to improve over the next weeks. The West is experiencing hot weather that will delay the seasonal increase in milk production. The milk supply is sufficient for demand keeping cheese plants full and butter plants running at full capacity. The USDA will release the September Milk Production report on Monday. I estimate milk production to be unchanged from a year ago and cow numbers to increase by 2,000 head from August.
AVERAGE CLASS III PRICES
| 3 Month: | $21.77 |
| 6 Month: | $21.04 |
| 9 Month: | $20.51 |
| 12 Month: | $20.24 |
CHEESE
For the week, blocks increased by 3.75 cents with 16 loads traded. Barrels increased by 12.25 cents with eight loads traded. Dry increased by 1.75 cents with 21 loads traded. After weeks of selling pressure, the price was finally low enough to generate interest from buyers. They were not aggressive but interested in bidding higher to obtain supply. Traders will exercise caution as it is unclear how much demand will improve as we move closer to the holidays.
BUTTER
For the week, butter increased by 3.50 cents with 161 loads traded. Grade A nonfat dry milk increased by 2.75 cents with 24 loads traded. The butter price may have limited upside price potential due to available supply. The price may find a level where buyers and sellers will be comfortable doing business.
OUTSIDE MARKETS SUMMARY
December corn closed down 2.00 cents per bushel at $4.0475, November soybeans closed down 18.75 cents at $9.7000 and December soybean meal closed down $2.50 per ton at $315.60. December Chicago wheat closed down 16.75 cents at $5.7275. December live cattle closed up $1.15 at $187.33. November crude oil is down $1.45 per barrel at $69.22. The Dow Jones Industrial Average is up 37 points at 43,276 with the NASDAQ up 116 points at 18,490.
