OVERVIEW:
Class III futures received a boost in the nearby months and closed unchanged to lower in the March and later contracts. Class IV futures showed little movement. Trading activity was moderate.
MILK:
Traders have little else to go on except for the movement of underlying cash prices. Fundamentals remain similar to what they have been over the past few weeks. The November Class III contract moved back above $17.00 where it had not been since Oct. 9 and the highest close since Oct. 2. Milk production is increasing seasonally, resulting in sufficient milk to be available for demand. There is no concern over a shortage of milk throughout the rest of the year or into next year. The level of milk production increase is uncertain as the government shutdown results in no reports being released this week for September production or inventory.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.94 |
| 6 Month: | $16.71 |
| 9 Month: | $16.76 |
| 12 Month: | $16.95 |
CHEESE:
Block cheese has been on a nice rebound with the price moving back to the highest level since Aug. 28. Cheese prices have remained in a wide sideways range for nearly a year. Prices are not expected to break out of the range anytime soon. The recent purchasing is from immediate orders needing to be filled. There is little reason for buyers to remain aggressive into the holiday season as they already have a good amount of cheese on hand. Inventory is expected to be decreasing according to regional reports, but there will not be a September Cold Storage report released this week.
BUTTER:
The butter price fell to a new low for the year and may see further weakness as buyers have a sufficient supply of butter on hand. Increased churning activity is providing butter for packaging in smaller sizes for the retail market. It would be anticipated that the low price could increase buying interest, but the time of year suggests otherwise. Buyers are not willing to build inventory.
OUTSIDE MARKETS SUMMARY:
December corn closed up .75 cent per bushel at $4.2325, November soybeans closed up 12.25 cents at $10.3175 and December soybean meal closed up $4.00 per ton at $285.00. December Chicago wheat closed up 1.00 cent at $5.0475. December live cattle closed up $1.83 at $243.65. December crude oil is down $0.22 per barrel at $56.93. The Dow Jones Industrial Average is up 516 points at 46,707, with the NASDAQ up 311 points at 22,991.
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