OVERVIEW:
Class III futures held up well despite the decline in cheese prices. Futures did not have much extra premium in the contracts and did not need to drop to keep in line with cash. The Global Dairy Trade auction trade-weighted average declined 1.4% from the previous event.
MILK:
The September Milk Production report was not released due to the government shutdown. The Global Dairy Trade auction trade-weighted average declined 1.4% from the previous event. This marks the fifth consecutive event posting a decline. The average price was $3,881 per metric ton with 40,621 metric tons sold. The Anhydrous milk fat price increased 1.5% to $7,038 per metric ton or $3.19 per pound. Butter decreased 0.8% to $6,662 per metric ton or $3.02 per pound. Cheddar cheese decreased 1.9% to $4,758 per metric ton or $2.16 per pound. Mozzarella decreased 5.3% to $3,230 per metric ton or $1.47 per pound. Skim milk powder decreased 1.6% to $2,559 per metric ton. Whole milk powder decreased 2.4% to $3,610 per metric ton or $1.64 per pound. Class IV futures continued under pressure while Class III contracts closed mixed. The weakness of spot prices did not provide support.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.82 |
| 6 Month: | $16.57 |
| 9 Month: | $16.66 |
| 12 Month: | $16.88 |
CHEESE:
The price range for cheese is becoming narrower. It is unlikely prices will break out of the range anytime soon. Increasing cheese production may result in a lower decrease in inventory throughout the rest of the year. Export demand is reported to be strong, but that is not sufficient to support prices.
BUTTER:
The pressure resumed on the butter price today, with the price falling to a new low for the year. Buyers are not interested in purchasing aggressively to make sure they do not have to chase the market higher into the holiday season. There is no concern over supply, with buyers stepping up only when they need to fill immediate orders.
OUTSIDE MARKETS SUMMARY:
December corn closed up 3.25 cents per bushel at $4.2300, November soybeans closed up 4.00 cents at $10.3475 and December soybean meal closed up $3.10 per ton at $290.00. December Chicago wheat closed up 3.50 cents at $5.0375. December live cattle closed down $5.60 at $239.83. December crude oil is up $2.00 per barrel at $59.24. The Dow Jones Industrial Average is down 185 points at 46,590, with the NASDAQ down 213 points at 22,740.
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