MILK
Milk futures were under pressure again today as the barrel cheese and butter prices slipped. Closer Class III contract fell over $1.00 over the past week. The September Milk Production report and the weakness of underlying cash prices took support from under the market. Milk production remains at its seasonal low but is expected to improve as the weather in most areas of the country has been good for cow comfort. The hot weather has subsided in California, but the duration of the hot weather has impacted milk output and will keep it subdued as it will take time and the next lactation for some cows to rebound significantly. Harvest has progressed and continues to progress rapidly keeping the market supplies of grain at reasonable prices. Spot milk prices showed a wide range from $1.50 under to $2.50 over class depending on the location. This is not too much different than it was a year ago. Milk production in September was slightly above a year earlier, leaving the industry comfortable with current supplies. Cheese output is steady with butter production higher.
AVERAGE CLASS III PRICES
| 3 Month: | $21.09 |
| 6 Month: | $20.50 |
| 9 Month: | $20.12 |
| 12 Month: | $19.97 |
CHEESE
Interestingly, Dairy Market News reports this week that cheese plants in the Midwest are bullish on the market. They indicate customers are adding to their previous orders as demand has increased recently. That has not been reflected in the daily spot market and may not be if supplies are sufficient and manufacturing schedules strong. The September Cold Storage report will be released on Friday afternoon and may show inventory significantly below a year ago. However, inventory may not matter depending on the demand or lack of demand for fresh cheese traded on the daily spot market.
BUTTER
The butter price continues to chop unable to establish a trend. August butterfat exports increased by 3,559 metric tons or 25.5% above August 2023. Year-to-date exports are 6.1% higher than during the same period last year. However, that is not having much impact on the market due to inventory higher than last year and heavy cream supplies keeping churns full.
OUTSIDE MARKETS SUMMARY
December corn closed up 2.50 cents per bushel at $4.2150, November soybeans closed down 1.25 cents at $9.9625 and December soybean meal closed down $4.60 per ton at $310.40. December Chicago wheat closed up 3.00 cents at $5.8150. December live cattle closed up $1.38 at $189.25. December crude oil is down $0.58 per barrel at $70.19. The Dow Jones Industrial Average is down 141 points at 42,374 with the NASDAQ up 139 points at 18,415.
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