MILK
Class III milk futures saw substantial price swings from overnight trade to the closing of the day trade. Traders took advantage of the price swings as they tried to take a small profit from the market. It is uncertain whether futures had been overdone to the upside the past two days and now the market corrected or if the selling pressure resulted from those who purchased futures last week and have decided to take profits today. The underlying spot price movement should not have triggered the heavy selling it did. Traders seem to focus on the weakness rather than the overall price calculation of the movement.
The Global Dairy Trade Auction trade-weighted average increased by 1.9%. There were 36,244 metric tons of dairy products sold at an average price of $4,089 per metric ton. Anhydrous milk fat increased 1.0% to $7,633 per metric ton or $3.46 per pound. Butter increased 0.5% to $7,009 per metric ton or $3.18 per pound. Cheddar cheese decreased 3.1% to $4,834 per metric ton or $2.19 per pound. Mozzarella decreased 6.6% to $4,315 per metric ton or $1.96 per pound. Skim milk powder increased 0.9% to $2,882 per metric ton or $1.31 per pound. Whole milk powder increased 3.2% to close at $3,826 per metric ton or $1.74 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $19.28 |
| 6 Month: | $19.15 |
| 9 Month: | $19.01 |
| 12 Month: | $18.96 |
CHEESE
The concern is that cheese prices may have reached the top due to the weakness of barrels. This may be the case, or it may just be buyers and sellers doing business with sellers taking advantage of the price strength over the past two days. Traders magnified the weakness of barrels rather than looking at the possible support indicated by stronger blocks. Whether the market was overdone to the downside today or not, volatility will remain substantial through the end of the year.
BUTTER
Traders were bearish on butter, pushing futures lower as the prices may see further weakness. Demand is not as strong as anticipated, and supplies are ample to meet demand. The price may weaken to the level it was at the end of last year. Buyers continue to purchase supply without having to chase the market higher.
OUTSIDE MARKETS SUMMARY
December corn closed down 2.00 cents per bushel at $4.2725, January soybeans closed down 11.25 cents at $9.9850 and December soybean meal closed down $1.70 per ton at $288.60. December Chicago wheat closed up 2.50 cents at $5.4975. February live cattle closed up $2.03 at $188.00. January crude oil is up $0.07 per barrel at $69.24. The Dow Jones Industrial Average is down 121 points at 43,269 with the NASDAQ up 196 points at 18,987.
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