MILK
Class III futures closed higher, but those gains will need to be supported by underlying cash or further pressure could surface. USDA released the October Milk Production report today showing an increase in milk production. Production in the top 24 states totaled 18.0 billion pounds, up 0.4% from October 2023. September revised milk production to 0.5% from the previous year, up from a gain of 0.2% as they reported last month. This is the second month of a significantly higher revision. Milk production per cow averaged 2,013 pounds, up 4 pounds from a year ago. Cow numbers increased by 16,000 head from September. The U.S. milk production increased by 0.2% from the previous year totaling 18.7 billion pounds. Production per cow was 3 pounds higher than a year ago. Cow numbers were 19,000 head more than in September and were up 10,000 head than a year ago. The increase in cow numbers is impressive given the tight heifer replacement numbers and the impact of bird flu on dairy farms. This report is not friendly to the market in the long term as this could mean higher milk output.
AVERAGE CLASS III PRICES
| 3 Month: | $19.32 |
| 6 Month: | $19.24 |
| 9 Month: | $19.09 |
| 12 Month: | $19.04 |
CHEESE
The block cheese price has increased for four consecutive days which has not been seen for quite some time. This may not mean the trend has changed but it may indicate buyers want to take advantage of the low prices. However, there may be limited upside price potential as buyers are unconcerned over the supply. The bearish implications of the milk production report may solidify their complacency.
BUTTER
Plentiful cream supplies keep churns running on full schedules utilizing as much cream as possible. This leaves sufficient butter available for demand limiting the decrease in inventory. Butter stocks are 11% higher than a year ago according to the September Cold Storage report released last month. USDA will release the October Cold Storage report on Monday. Butter is under pressure with the current price below where it was at the beginning of the year.
OUTSIDE MARKETS SUMMARY
December corn closed up 3.00 cents per bushel at $4.3025, January soybeans closed down 8.00 cents at $9.9050 and December soybean meal closed up $.80 per ton at $289.40. December Chicago wheat closed up 2.75 cents at $5.5250. February live cattle closed down $0.08 at $187.93. January crude oil is down $0.49 per barrel at $68.75. The Dow Jones Industrial Average is up 140 points at 43,408 with the NASDAQ down 21 points at 18,966.
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