MILK:
Class III milk futures showed interesting trade after the spot trading period. It seemed likely that futures would decline significantly due to the weakness of cheese prices. There was initial pressure, but it was short-lived with deferred contract finding buying interest. The December and January contracts showed declines while later contracts posted nice gains. This may have been due to increased pressure on the later contracts when nearby contracts increased earlier this week. The market may have corrected to realign with where it should be seasonally. Milk production is reported to have had somewhat of a surge recently as colder weather has improved cow comfort and feed intakes. Along with the increase in milk production is the increase in components. Components have been higher than usual for much of the year and are seeing further gains. Milk receipts at the plant level are increasing causing plants to run on full schedules. This should keep the market well-supplied with cheese throughout the holiday season.
AVERAGE CLASS III PRICES:
| 3 Month: | $18.99 |
| 6 Month: | $19.07 |
| 9 Month: | $18.99 |
| 12 Month: | $18.92 |
CHEESE:
Cheese prices are expected to chop around in a range with lower prices generating buyer interest and higher prices generating selling interest. There is sufficient supply for demand leaving buyers rather comfortable and complacent. Spot milk prices are at class as much as $1.00 above class, indicating a good balance of supply and demand.
BUTTER:
The butter price is expected to have limited potential. The lack of buyers during spot trading today may indicate that the recent strong buyer interest has been filled. Sellers held back to see whether buyers would be more aggressive. The steady price and lack of buying interest may turn sellers more aggressive on Friday as they take advantage of the recent price increase. Butter production remains strong as cream supplies remain heavy. Some cream is moving to Class II products for the holiday season, relieving some of the heavy supply available to butter manufacturers.
OUTSIDE MARKETS SUMMARY:
March corn closed up 5.00 cents per bushel at $4.3500, January soybeans closed up 10.00 cents at $9.9375 and January soybean meal closed down $.80 per ton at $291.10. March Chicago wheat closed up 10.00 cents at $5.5825. February live cattle closed down $2.00 at $186.33. January crude oil is down $0.13 per barrel at $68.41. The Dow Jones Industrial Average is down 248 points at 44,766 with the NASDAQ down 35 points at 19,700.
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