MILK:
Traders hesitated over buying milk futures aggressively as the recent increases may increase the selling interest of traders in the spot market. Holiday orders have been completed, reducing the need for buyers of cheese and butter to purchase to fill orders. It is too early for buyers to purchase ahead for next year as they do not want to build and pay for inventory this much in advance. Milk production is sufficient for demand. Bottling for school accounts has slowed with milk being diverted to manufacturing. Manufacturing plants will absorb the extra milk without difficulty. The bird flu had been anticipated to impact milk production significantly but has not tightened the market to the extent that there is a shortage of milk. The tight heifer supply was expected to reduce cow numbers and tighten the milk supply, but that has not had the impact it was thought to have. USDA will release the November Milk Production report on Thursday which will show us cow numbers, production per cow, and milk production for the month.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.67 |
| 6 Month: | $19.62 |
| 9 Month: | $19.39 |
| 12 Month: | $19.23 |
CHEESE:
Block cheese has remained steady or increased for eight consecutive days with the price moving back to the highest level since October 30. The barrel cheese price has not followed the same pattern with consecutive price increases in the past two days. The price is back to the highest level since November 7. Traders are cautious over the upside price potential as holiday demand has been filled and supply is sufficient for fill-in orders and satisfy regular demand.
BUTTER:
There have been some reports that butter inventory is increasing. Demand has been good, but production has been strong due to the heavy cream supplies. Increased amounts of cream have been utilized for other holiday Class II products, alleviating some of the cream available for butter manufacturing. However, more will be available after the holidays keeping churns running at capacity and supply readily available to the market.
OUTSIDE MARKETS SUMMARY:
March corn closed down 1.50 cents per bushel at $4.4350, January soybeans closed down 5.25 cents at $9.7675 and January soybean meal closed up $.30 per ton at $287.20. March Chicago wheat closed down 5.00 cents at $5.4500. February live cattle closed down $0.23 at $189.75. January crude oil is down $0.63 per barrel at $70.08. The Dow Jones Industrial Average is down 268 points at 43,450 with the NASDAQ down 65 points at 20,109.
