OVERVIEW:
It was another dismal day for Class IV futures with double-digit losses in most contracts. Butter has not been able to find a bottom as selling remains active.
MILK:
Milk futures did not provide much hope for increasing milk prices. Class III futures closed mixed due to limited movement in the underlying cash market. The market had little reason for volatility, keeping trading subdued. Trading volume was light due to little movement in cheese prices. Class IV futures showed greater movement, but it was unfortunately lower, with contracts posting double-digit losses. It will take a monumental effort for prices to rebound to the levels they were in June and July. Increasing cow numbers and increasing milk production per cow indicate there will be a sufficient milk supply for the rest of this year. There is little to indicate a tighter supply of cheese or butter, leaving buyers of dairy products comfortable purchasing as needed or purchasing for later demand at lower prices. There has been some indication that culling dairy cattle is beginning to increase due to the low milk prices.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.78 |
| 6 Month: | $16.77 |
| 9 Month: | $16.85 |
| 12 Month: | $16.96 |
CHEESE:
The minor increase in block cheese today did little to get traders excited over higher cheese prices. The fact that blocks initially increased by 0.50 cent before slipping back points to limited upside price potential in the near term. Cheese production is increasing as milk volumes increase. This may keep a sufficient supply available to the market. Buyers are ready to buy supplies, but at lower prices.
BUTTER:
One has to wonder where the butter price will find support. The market is not overwhelmed with supply, but buyers have some on hand and are buying limited volumes due to the uncertainty of demand. Manufacturers continue to move butter supplies as quickly as possible rather than letting inventory build more than desired. Increasing cream supply is keeping churns active and increasing churning schedules.
OUTSIDE MARKETS SUMMARY:
December corn closed down 6.75 cents per bushel at $4.2325, November soybeans closed down 3.50 cents at $10.4275 and December soybean meal closed down $2.90 per ton at $285.70. December Chicago wheat closed up 1.50 cents at $5.2500. October live cattle closed up $4.63 at $234.60. October crude oil is up $0.61 per barrel at $63.30. The Dow Jones Industrial Average is up 49 points at 45,883, with the NASDAQ is up 208 points at 22,349.
