MILK:
Class III milk futures regained all the losses since Oct. 22 with the largest one-day gains seen in nearby contracts in quite some time. This strength will only be maintained as long as cheese prices provide support. Fill-in buying for the holidays has been evident with strength in Class III contracts. The strong dry whey price provided support to Class III prices with the price reaching another new high for the year. Spot milk prices showed a wide range as the holiday season is nearby. Prices range from $3 under class to $2.50 over class. It is unusual for prices to be over class at this time. Some milk plants in the Central region report that milk levels are lower year over year for various reasons. The production of Class II products for the holidays has increased utilizing some of the available cream. If milk production closes the year at the current level projected by USDA, there will be two consecutive years of no production growth. It is uncertain whether that will be bullish for milk prices next year.
AVERAGE CLASS III PRICES:
3 Month: | $19.62 |
6 Month: | $19.62 |
9 Month: | $19.43 |
12 Month: | $19.30 |
CHEESE:
The industry has mixed feelings over the current supply and demand situation. There has been greater buying interest in cheese as the holiday season approaches. Some indicated demand has been sluggish recently. This could be due to cheese already having been purchased ahead with buyers showing limited interest. Overall demand for fresh cheese has improved recently providing support to the spot market. The recent price increase may have brought buyers off the sidelines as they want to purchase before prices increase further.
BUTTER:
Heavy cream supply keeps churns active and butter moving to the market and into inventory. Butter production has been higher than the previous year for 11 consecutive months. Production and inventory have been ample to satisfy demand. The price is struggling to maintain support and may retest the recent lows before the end of the year.
OUTSIDE MARKETS SUMMARY:
March corn closed down 4.75 cents per bushel at $4.4350, January soybeans closed up 0.25 cent at $9.9575, and January soybean meal closed down $1.60 per ton at $289.50. March Chicago wheat closed down 4.75 cents at $5.5850. February live cattle closed down $0.53 at $190.85. January crude oil is down $0.27 per barrel at $70.02. The Dow Jones Industrial Average is down 234 points at 43,914 with the NASDAQ down 132 points at 19,903.