MILK
Milk futures tried to recover from the bearishness of the September Milk Production report but were held back somewhat by the weakness of barrel cheese and butter. Spot prices need to move higher in tandem to generate strong buying interest. Steady milk production and the potential increase in output as the rest of the year progresses may limit the upside-price potential unless demand improves significantly. Milk production for the third quarter was nearly the same as the previous year with a difference of only 15 million pounds, unchanged on a percentage basis. There were 11 of the top 24 states showing a decline in milk production. The largest percentage decline was in New Mexico which was down 9.1%. This was followed by Virginia down 5.3%, Arizona down 4.6% and Illinois down 4.4%. The rest of the states with lower milk production showed a decrease of less than 3.0%. The largest gain was seen in South Dakota with production up 7.9% followed by Texas up 4.9%. The rest of the gains were less than 3.0%. The November advanced Class I price was announced at $22.53, down $0.64 from October and up $2.78 from November 2023.
AVERAGE CLASS III PRICES
| 3 Month: | $21.16 |
| 6 Month: | $20.59 |
| 9 Month: | $20.20 |
| 12 Month: | $20.05 |
CHEESE
Much of the buying of cheese for the holidays had been completed for the cheese that had been contracted. The business now through the holidays will be regular business and orders that come in over and above contracted supplies. Buyers anticipate sufficient supply leaving them less aggressive in the spot market. The September Cold Storage report will be released on Friday and is expected to show cheese inventory below a year ago. However, the supply will be sufficient for needs. Steady cheese production will keep fresh cheese available for the daily spot market.
BUTTER
Butter supplies are sufficient, and churning is active. This limits the decrease in inventory keeping stocks higher than a year ago. The butter price is expected to remain choppy moving through the rest of the year with limited upside potential.
OUTSIDE MARKETS SUMMARY
December corn closed up 2.50 cents per bushel at $4.1900, November soybeans closed up 5.75 cents at $9.9750 and December soybean meal closed down $2.70 per ton at $315.00. December Chicago wheat closed up 2.50 cents at $5.7850. December live cattle closed down $0.25 at $187.88. December crude oil is down $0.97 per barrel at $70.77. The Dow Jones Industrial Average is down 410 points at 42,515 with the NASDAQ down 296 points at 18,277.
