Thursday Closing Dairy Market Update - Spot Prices Lack Solid Direction

OVERVIEW:

Class III futures came back from their lows that were seen around the time spot trading took place. Class IV futures posted strong gains in later contracts. Spot milk prices have strengthened over the past week as demand seems to be improving.

MILK:

Class III milk futures moved within a 30-50 cents range, ultimately closing higher in most contracts. Milk production is slowly improving as cooler temperatures improve cow comfort. Class I demand is steady. Spot milk prices range from $1.00 below class to $1.00 above class. There has been some improvement in demand from manufacturing, keeping the milk supply from becoming burdensome. Steady cheese production and steady demand for cheese keep the supply from building. Higher milk production is expected to remain higher throughout the rest of the year. Hopefully, the balance of milk supply to demand will support prices and higher milk checks as time moves forward.

AVERAGE CLASS III PRICES:

3 Month:	$17.39
6 Month:	$17.28
9 Month:	$17.22
12 Month:	$17.28

CHEESE:

Cheese production is steady to stronger as milk receipts at the plant level are improving. Some plants indicate that they have been busy filling contracted orders, leaving spot supplies somewhat tight. However, the consensus is that cheese is readily available to meet demand. Packagers and recutters continue to purchase cheese in preparation for the holidays.

BUTTER:

Cream supplies have been increasing, putting pressure on cream prices. With the plentiful cream supplies, churning has been active with many plants indicating they are not looking to purchase cream from the spot market. Buyers have been looking to increase ownership to build supplies ahead of the holiday season.

OUTSIDE MARKETS SUMMARY:

December corn closed up 5.25 cents per bushel at $4.2175, November soybeans closed up 10.75 cents at $10.2375 and December soybean meal closed up $5.70 per ton at $279.30. December Chicago wheat closed up 5.50 cents at $5.1475. December live cattle closed down $1.03 at $233.48. November crude oil is down 1.30 per barrel at $60.48. The Dow Jones Industrial Average is up 79 points at 46,520, with the NASDAQ up 89 points at 22,844.