OVERVIEW:
Class III milk futures closed higher, but not as much as would have been expected. The price moved above the high of last week. Barrels followed suit and moved to the highest level since September 3.
MILK:
The November Class III milk contract moved to $18.09 but fell back from that level to close below $18.00. This is the first time it has been above $18.00 since August 27. The November contract has increased by about $1.80 per cwt over the past two weeks. The recent increase has been a surprise as prices usually show weakness at this time of year. Maybe the market is making a counter-seasonal movement. However, it is unlikely the recent trend will continue through the end of the year. Class IV futures have not seen the strength of Class III, with the spread continuing to widen. Milk production is not slowing down but is increasing seasonally.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.36 |
| 6 Month: | $17.16 |
| 9 Month: | $17.14 |
| 12 Month: | $17.25 |
CHEESE:
The block cheese price moved to the highest level since August 28. The barrel cheese price moved to the highest level since September 3. Much of the buying strength is tied to orders being filled that have been recently placed. The spot market is a fresh cheese market, and that is in greater demand at present. Cheese has been purchased ahead of the holiday season and is being recut and packaged for retail and gift boxes.
BUTTER:
The slight decline in the butter price does not necessarily mean that the price will fall back to a new low again. However, it may indicate that buyers will not be aggressive at higher prices. Butter production is increasing due to heavier cream supplies. Bulk butter supplies are sufficient moving toward the holiday season.
OUSIDE MARKETS:
December corn closed up 5.50 cents per bushel at $4.2875, November soybeans closed up 25.50 cents at $10.6725 and December soybean meal closed up $4.10 per ton at $298.20. December Chicago wheat closed up 13.50 cents at $5.2600. December live cattle closed down $6.75 at $227.18. December crude oil is down $0.19 per barrel at $61.31. The Dow Jones Industrial Average is up 337 points at 47,545, with the NASDAQ is up 433 points at 23,637.
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