MILK
Milk futures are receiving no break from the bearishness of market participants. Demand for dairy products varies but is less than expected for this time of year. An increase in demand may not be sufficient to turn the trend, as buyers are not interested in purchasing ahead for anticipated demand. They see milk supply continuing to be better than expected with the potential for production in October to be higher than a year ago. Even an increase in demand may not change the bearishness in the market. USDA released the final decision of the Federal Order pricing formula revisions on Tuesday. There are five key areas of the changes that farmers will have an opportunity to vote on before the end of the year. A change in the milk compositions factors, which increase the protein, other solids, and nonfat solids. Surveyed commodity prices will drop the barrel cheese price from the monthly average surveys that determine milk prices. The Class III and Class IV formula factors will be updated, increasing price about 4 to 6 cents for the "make" allowances. The base Class I skim milk prices will move back to the higher of the Class III or Class IV prices.
AVERAGE CLASS III PRICES
| 3 Month: | $19.16 |
| 6 Month: | $18.98 |
| 9 Month: | $18.82 |
| 12 Month: | $18.79 |
CHEESE
Cheese prices remain unable to find a bottom. Sellers continue to offer cheese to the market, leaving buyers willing to hold back and wait for lower prices. There are some signs of better demand but not enough to cause any concern over supply. The food service industry continues to be a drag on the market, holding back some of the demand that usually would be seen at this time.
BUTTER
Butter price continues to chop around and may establish a lower sideways trading range after falling to the lowest level since January during Tuesday's trade. Buyers of butter remain comfortable to purchase on an as-needed basis with much of the expected needs for the rest of the year already on hand.
OUTSIDE MARKETS SUMMARY
December corn closed down 2 cents per bushel at $4.2650, January soybeans closed down 2.75 cents at $10.0775 and December soybean meal closed down $1.30 per ton at $291.60. December Chicago wheat closed down 11.25 cents at $5.4100. December live cattle closed down $0.38 at $184.03. December crude oil is down $0.13 per barrel at $67.99. The Dow Jones Industrial Average is up 47 points at 43,958, with the NASDAQ down 51 points at 19,231.
