OVERVIEW:
Class III futures closed much like they traded after spot trading took place. Contracts closed mixed with nearby months showing some strength. Class IV futures came under some pressure despite butter increasing slightly.
MILK:
There was little fresh news to move the market, with underlying cash showing limited activity. Traders remain cautious after the past two weeks of price weakness. Milk futures being unable to trend higher at this time of year is cause for concern. Increasing cow numbers and production per cow keeps a plentiful milk supply available for bottlers and manufacturers. Cooler weather will improve cow comfort and the potential for further increases in the milk supply. The USDA will release the World Agricultural Supply and Demand report on Friday, which is expected to reduce the price estimates for both milk prices and dairy product prices.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.17 |
| 6 Month: | $17.21 |
| 9 Month: | $17.27 |
| 12 Month: | $17.35 |
CHEESE:
It is unclear whether cheese prices have found support. The recent weakness at this time of year does not bode well for the market. Buyers see a sufficient supply, leaving them less aggressive. Demand is not as good as anticipated, causing buyers to purchase more on an as-needed basis rather than increasing stocks for later demand. Increasing milk output leaves a sufficient supply available for cheese production.
BUTTER:
The butter price has been able to hold above the $2.00 level and hopefully maintain that level. However, with increasing cream supply and churning, the price may dip below that level before it finds solid support. Inventory is lower than a year ago, but there is sufficient supply available, keeping buyers satisfied and generally buying on weakness.
OUTSIDE MARKETS SUMMARY:
December corn closed up 3.75 cents per bushel at $4.2175, November soybeans closed up 6.75 cents at $10.3375 and December soybean meal closed up $1.60 per ton at $285.60. December Chicago wheat closed up 4.50 cents at $5.2375. October live cattle closed down $0.18 at $235.80. October crude oil is up $0.39 per barrel at $62.26. The Dow Jones Industrial Average is up 114 points at 45,515, with the NASDAQ up 98 points at 21,799.
