MILK
Milk production across the country is steady even though a contraction in farm numbers continues. Culling has been running below the previous year so far as farms have retained cows that would have been culled due to lower milk prices, higher replacement prices and higher milk prices. The higher milk prices lowered the bar for cows to remain in the herd. Milk futures have increased in the past two days as underlying cash prices have increased. The underlying cash prices are trying to find a level at which the market may be balanced between supply and demand. This may bring some of the Class III futures contracts back up to $20.00 in the first half of the year and Class IV contracts remaining over $21.00.
AVERAGE CLASS III PRICES
| 3 Month: | $21.64 |
| 6 Month: | $20.89 |
| 9 Month: | $20.39 |
| 12 Month: | $20.15 |
CHEESE
It is uncertain as to how much upside potential there is for cheese prices. The strength of the past two days is promising, but not certain. There is no upside void in the market as sellers continue to offer cheese. Prices have increased as buyers become more aggressive. Once that buying interest is satisfied, there may not be much interest in supporting the market. Demand will need to improve to support higher prices.
BUTTER
The volume of butter being traded in the spot market is satisfying demand. Buyers have not had to chase the market higher. The upside potential may be limited as sellers want to move supply and are bringing large quantities to the spot market. There have been. 127 loads of butter sold so far this week. Buying interest is good, but the supply is plentiful.
OUTSIDE MARKETS SUMMARY
December corn closed up 3.50 cents per bushel at $4.0475, November soybeans closed down 11.00 cents at $9.8000 and December soybean meal closed up $1.90 per ton at $313.70. December Chicago wheat closed up 5.50 cents at $5.8500. December live cattle closed up $0.08 at $186.60. November crude oil is down $0.19 per barrel at $70.39. The Dow Jones Industrial Average is up 337 points at 43,078 with the NASDAQ up 51 points at 18,367.
.jpg)
