MILK:
Milk futures posted substantially higher prices. The January through April Class IV contracts moved back above $21.00 where they had not been since November 20. Class III futures rebounded due to being oversold while Class IV futures increased due to the strength of butter and the nonfat dry milk price. The bullish milk production report had some impact on the strength but buyers in the spot market did not purchase more aggressively because of the report. They purchased based on needs and are not interested in speculating whether the milk supply might tighten next year. The milk production report released on Thursday showed a significant revision in cow numbers for October. The USDA revised the October cow numbers up 5,000 head resulting in an increase in cow numbers from September of 24,000 head. Thus, the decline of 5,000 head from October was not bullish, but neutral. Cow numbers were 20,000 more than a year ago. Milk production in California declined 9.2 percent with cow number only down 1,000 head. The decline resulted from production per cow being down 175 pounds compared to a year ago.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.37 |
| 6 Month: | $19.36 |
| 9 Month: | $19.23 |
| 12 Month: | $19.08 |
CHEESE:
For the week, blocks increased by 5.25 cents with 13 loads traded. The average price for the week was $1.85. Barrels increased by 3.25 cents with 11 loads traded. The average price was $1.7640. Dry whey decreased by 5.25 cents with 11 loads traded. The average price was 74.40 cents. Some had anticipated cheese buyers might be more aggressive today due to the decline of milk production in the November Milk Production report. However, that was not the case as buyers are doing business as needed. This milk had already been utilized in the market and did not result in any concern over the milk supply.
BUTTER:
For the week, butter increased by 9 cents with 19 loads traded. The average price for the week was $2.5190. Grade A nonfat dry milk increased by 1.50 cents with 15 loads traded. The average price was $1.3795. Butter moved to the highest price since November 15. Buyers remain cautious as the current fundamentals do not suggest the price will trend higher. The USDA will release the November Cold Storage report on Monday.
OUTSIDE MARKETS SUMMARY:
March corn closed up 5.50 cents per bushel at $4.4625, January soybeans closed up 11.50 cents at $9.7450 and March soybean meal closed up $11.20 per ton at $302.20. March Chicago wheat closed steady at $5.3300 and February live cattle closed up $1.85 at $188.40. February crude oil is up $0.16 per barrel at $69.54. The Dow Jones Industrial Average is up 498 points at 42,840 with the NASDAQ up 200 points at 19,573.
