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.
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