OVERVIEW:
Class III futures were mostly higher, with deferred contracts posting double-digit gains. The underlying spot markets did not provide much reason for price movement. The butter price held after three consecutive days of decline.
MILK:
There was not much news or volatility to create much trading interest. Class III contracts were mostly higher with deferred contracts posting double-digit gains. That leaves little to get excited over for Friday's trade. The edairynews publication had an article titled, "$20 Milk Ahead? Tightening Supply Hints at a Price Rally." The title catches your attention, but the reality is that the expectation for this price is not until late 2026 and 2027. It would seem that this will likely be a reaction to prolonged low milk prices. Cows will be culled, reducing the milk available to the market. Heifer prices are not expected to decrease anytime soon. An increase in milk prices will be a normal response after a period of low milk prices. We only hope those prices will materialize sooner rather than later.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.92 |
| 6 Month: | $16.79 |
| 9 Month: | $16.92 |
| 12 Month: | $17.10 |
CHEESE:
Cheese production is steady in much of the country. Demand varies but is generally lighter than a year ago. Most cheese plants are receiving a sufficient supply of milk to produce cheese with little interest or need to reach out to the spot market for supply. The current fundamentals in the cheese market are not supportive of an extended price increase.
BUTTER:
At least the butter price held steady rather than showing further weakness. This does not indicate the market found support, but it is encouraging that no sellers showed up during trading. Sellers may hold back to see if buyers might become more aggressive and try to purchase at the low price. Price strength might be limited, but any increase would be welcomed.
OUTSIDE MARKETS SUMMARY:
December corn closed down 6.50 cents per bushel at $4.2875, January soybeans closed down 26.75 cents at $11.0750 and December soybean meal closed down $12.10 per ton at $312.70. December Chicago wheat closed down 19.25 cents at $5.3550. December live cattle closed down $1.75 at $218.78. December crude oil is down $0.08 per barrel at $59.52. The Dow Jones Industrial Average is down 399 points at 46,912, with the NASDAQ down 446 points at 23,054.
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