OVERVIEW:
It seemed traders decided to liquidate some of their positions ahead of the weekend in Class III futures. Underlying cash cheese and dry whey were supportive, but traders decided to sell ahead of the weekend. Class IV futures ended a negative week.
MILK:
Class III futures had a strong week but closed on a negative note. Cheese and dry whey spot prices posted nice gains this week as buyers became more aggressive. The opposite was true for Class IV futures with nearby contracts down about $0.60 per cwt. The weakness in the butter price put significant pressure on Class IV futures. There has been no significant change in fundamentals, but seasonal buying seems to be prevalent in cheese, while butter is running counter-seasonal. The outlook for milk prices has improved despite the weakness of butter. This will keep milk production strong as farmers hold onto cows and push milk production to improve cash flow. Dairy Foods publication released its annual Top 100 Dairy Processor list. Dairy Farmers of America is ranked number one for sales in 2024, totaling $23.0 billion. Saputo Inc. is number two at $13.975 billion. Number three is Nestle North America at $11.0 billion. Fourth is Savencia Fromage & Dairy, U.S. operations at $8.416 billion. Rounding out the top five processors is Danone North America at $7.765 billion.
AVERAGE CLASS III PRICES:
| 3 Month: | $18.09 |
| 6 Month: | $18.10 |
| 9 Month: | $18.02 |
| 12 Month: | $18.02 |
CHEESE:
For the week, blocks increased 14.50 cents with 14 loads traded. The weekly average price was $1.8115. Barrels increased by 8.75 cents with three loads traded. The weekly average price was $1.7845. Dry whey increased 3.00 cents with eight loads traded. The weekly average price was 56.40 cents. Cheese prices moved to the highest level in two months. The dry whey price is at the highest level in one month. The gains seemed to be the result of seasonal buying and the fear of being left behind and facing higher prices. This increased the buying interest.
BUTTER:
For the week, butter decreased 9.00 cents with 17 loads traded. The weekly average price was $2.4175. Grade A nonfat dry milk decreased 2.50 cents with 8 loads traded. The weekly average price was $1.2760. The butter price moved to the lowest level since May 21 in a counter-seasonal pattern. It may be difficult for the price to regain the losses of the past month anytime soon.
OUTSIDE MARKETS SUMMARY:
December corn closed down 1.50 cents per bushel at $4.0550, November soybeans closed down 6.25 cents at $9.8750 and December soybean meal closed steady at $285.20. September Chicago wheat closed down 3.75 cents at $5.1450. October live cattle closed down $6.25 at $225.98. September crude oil is unchanged at $63.88 per barrel. The Dow Jones Industrial Average is up 207 points at 44,176, with the NASDAQ is up 207 points at 21,450.
