OVERVIEW:
Class III futures found support today from higher cheese prices. Butter fell back, nearly eliminating the gains of the past two days. Nonfat dry milk was unable to bounce from the low reached on Thursday.
MILK:
Class III milk futures received a boost from the increase in spot cheese prices. However, shortly after spot trading, futures slipped back from the highs. As the day progressed, futures slowly slipped back from the highs. Traders remain cautious over the upside potential of underlying cash prices. The movement of butter may be the pattern that will also be seen for cheese. Milk output in the Central region is steady, with extra milk continuing to move to areas that are in deficit of milk supply for bottling needs. The demand for spot milk is low, as most plants have sufficient supply from patrons or regular suppliers, eliminating the need to purchase spot milk. Overall, milk production continues to increase across the country. The nonfat dry milk price declined on Wednesday to the lowest level since May 7, 2024, and failed to generate buying interest today.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.70 |
| 6 Month: | $16.56 |
| 9 Month: | $16.69 |
| 12 Month: | $16.89 |
CHEESE:
Cheese production is steadily increasing seasonally. This leaves a sufficient supply for demand, with buyers having little concern over supply. Some varieties of cheese are tighter than others. The market gives the impression that the supply of barrel cheese is tight, as there is limited activity seen on the daily spot market. It could also be that demand for barrels is lighter, keeping buyers less aggressive.
BUTTER:
The weakness of butter today may see buyers step back again, as recent buying interest has been filled. Sellers may be more aggressive in their attempt to move supplies before the price falls back too far. The price may develop a limited sideways trading range. Much of the purchasing being done seems to be for immediate needs, as end users already have a sufficient supply on hand for upcoming holiday demand.
OUTSIDE MARKETS SUMMARY:
December corn closed up 5.00 cents per bushel at $4.2175, November soybeans closed up 4.25 cents at $10.1075 and December soybean meal closed up $1.00 per ton at $276.90. December Chicago wheat closed up 3.75 cents at $5.0250. December live cattle closed up $1.10 at $247.88. November crude oil is down $0.80 per barrel at $57.47. The Dow Jones Industrial Average is down 301 points at 45,952 with the NASDAQ down 108 points at 22,563.
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