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.
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