OVERVIEW:
Class III futures price movement was rather uneventful. Trading volume was very light as traders saw insufficient volatility for day trading. The World Agricultural Supply and Demand Estimates is scheduled for release on Thursday but will not be because of the government shutdown.
MILK:
Class III milk futures were mixed, with the limited gain in the block cheese price being offset by the decline in butter. This left little reason for traders to do much trading. The volatility was too light to even try to scalp the market for a small profit. Trading volume was very light. Class IV futures took another hit, posting double-digit losses. Milk production is increasing seasonally as cooler weather improves cow comfort. The butterfat content in milk is increasing and remains above a year ago. This provides more cream for the production of butter and Class II products. Protein levels are also higher, increasing cheese yields. The World Agricultural Supply and Demand report is scheduled to be released on Thursday, but it will not be released due to the government shutdown. The report contains USDA estimates for milk production, milk prices, and dairy product prices for this year and 2026. Those estimates will be released when the government is in full operation again. It does not look like it will be anytime soon, as there seems to be no progress made on their differences of opinion on the budget.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.05 |
| 6 Month: | $16.97 |
| 9 Month: | $17.00 |
| 12 Month: | $17.12 |
CHEESE:
Spot milk prices are strengthening, with spot milk running from class to $3.00 over class this past week. Cheese output has increased and remains strong. Demand is steady and should slowly improve as the holiday season nears. However, the increase in cheese production may outpace the decrease in cheese inventory.
BUTTER:
There is a balance between supply and demand for butter. Unfortunately, the balance is at a low price. The price at the close of spot trading today is only 3.00 cents from the previous low for the year, with a strong possibility that it will revisit that level.
OUTSIDE MARKETS SUMMARY:
December corn closed up 2.25 cents per bushel at $4.2200, November soybeans closed up 7.50 cents at $10.2950 and December soybean meal closed up $1.10 per ton at $278.00. December Chicago wheat closed up .50 cent at $5.0725. December live cattle closed up $1.15 at $238.88. November crude oil is up $0.57 per barrel at $62.30. The Dow Jones Industrial Average is down one point at 46,602, with the NASDAQ up 255 points at 23,043.
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