MILK
Milk futures continued to remain under pressure in reaction to lower cheese prices. The question is, "When will the weakness end?" It is the time of year when demand should support the market as holiday demand increases consumer demand. However, the trade is comfortable with current supply and demand and has little reason to be aggressive. Milk production should increase seasonally with the potential it may increase more than expected. Milk production per cow has been strong and may increase further as milder weather improves cow comfort. The slower culling rate and increased milk production may result in a growing milk supply moving through the end of the year and into a period of generally slower demand. The bird flu was anticipated to impact milk production and was initially viewed as bullish, but so far that has not been the case.
AVERAGE CLASS III PRICES
| 3 Month: | $19.47 |
| 6 Month: | $19.38 |
| 9 Month: | $19.31 |
| 12 Month: | $19.31 |
CHEESE
The block cheese price has declined to the lowest level since May 2 and hopefully will not fall back to the level it was at the beginning of the year. The barrel price is at the lowest level since April 29. The market is not overwhelmed with cheese but has sufficient supply for demand. Cheese production is steady for now but will increase as farm milk production increases.
BUTTER
The butter price has been holding better than cheese but may come under pressure as contracts are filled and buyers turn to purchase on an as-needed basis. Increased churning activity will provide sufficient supply for demand and build inventory through the end of the year.
OUTSIDE MARKETS SUMMARY
December corn closed up 2.00 cents per bushel at $4.1850, January soybeans closed up 4.50 cents at $10.0175 and December soybean meal closed down $.10 per ton at $299.50. December Chicago wheat closed up 3.75 cents at $5.7250. December live cattle closed down $0.30 at $184.78. December crude oil is up $0.52 per barrel at $71.99. The Dow Jones Industrial Average is up 427 points at 42,222 with the NASDAQ up 259 points at 18,439.
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