OVERVIEW:
Milk futures held up well with a mixed close. Class III futures were supported by steady barrels and higher blocks. Class IV futures did not succumb to heavy selling pressure due to the futures being overdone to the downside. The Global Dairy Trade auction showed the trade-weighted average down 0.8%.
MILK:
Milk futures held up well considering further loss in the butter price. Class III futures were mixed, with some support stemming from the higher block cheese price. Class IV futures held surprisingly well despite the decline in the butter and nonfat dry milk prices. Class IV futures had been overdone to the downside, leaving little reason for further losses to align with cash. The Global Dairy Trade Auction trade-weighted average declined 0.8% to an average price of $4.041 per metric ton. This is the third consecutive decline in the trade-weighted average. Anhydrous milk fat declined 1.5% to $6,802 per metric ton or $3.09 per pound. The butter price declined 0.8% to $6,982 per metric ton or $3.13 per pound. Cheddar cheese increased 2.2% to $4,814 per metric ton or $2.18 per pound. Mozzarella fell 9.6% to $3,860 per metric ton or $1.75 per pound. Whole milk powder declined 0.8% to $3790 per metric ton or $1.72 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.85 |
| 6 Month: | $16.80 |
| 9 Month: | $16.88 |
| 12 Month: | $16.97 |
CHEESE:
It appears that cheese prices have found support for now, but there may be limited upside price potential. Time is running out for a seasonal increase in prices. If prices are unable to increase during this time of year, it would take an unexpected event to see strength throughout the rest of the year. Buyers have been purchasing supplies on the price weakness.
BUTTER:
Butter remains unable to find support. This is the lowest price it has been since October 12, 2021. Lower prices should stimulate buying interest, but unfilled bids remain under the market each day. Buyers continue to hold out for lower prices and have been able to purchase the butter they need as sellers continue to offer it at lower prices to keep moving plant supplies. The U.S. price is now $1.36 below the world price based on the Global Dairy Trade auction.
OUTSIDE MARKETS SUMMARY:
December corn closed up 6.25 cents per bushel at $4.2950, November soybeans closed up 7.00 cents at $10.4975 and December soybean meal closed up $.40 per ton at $286.10. December Chicago wheat closed up 9.00 cents at $5.3400. October live cattle closed down $1.15 at $233.45. October crude oil is up $1.22 per barrel at $64.52. The Dow Jones Industrial Average is down 126 points at 46,758, with the NASDAQ down 15 points at 22,334.
