GENERAL OVERVIEW:
It was another dismal day for the dairy complex. New lows again for Class III milk futures, with Class IV contracts following the same pattern. The USDA will release the October Milk Production report tomorrow.
MILK:
Milk production in the Eastern region is seasonally strong. At the same time, demand for milk and cream is increasing, keeping a balance between supply and demand. Plants have been running overtime to prepare for some downtime next week over the Thanksgiving holiday. More milk will be available on the spot market for those who want it. Spot milk prices are currently running $1.50 below to $1.50 over class. Many cheese plants will continue to operate throughout the holiday as the milk needs to be processed. Milk plants in the Central region are seeing steady volumes of milk over the recent few weeks, but the overall volume is higher than a year ago. The market is anticipating a significant increase in milk production in the October report that will be released tomorrow. Production per cow is expected to be significantly higher with another increase in cow numbers.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.37 |
| 6 Month: | $16.22 |
| 9 Month: | $16.46 |
| 12 Month: | $16.71 |
CHEESE:
Cheese demand has improved, but strong output keeps the market well-supplied and buyers unaggressive. The time of year does not favor an increase in prices or a change in trend. Lower prices should increase demand, but increased production keeps the market satisfied. The level of inventory is uncertain, as there has not been a cold storage report released since September. The next report is not scheduled to be released until December.
BUTTER:
The butter price is only 0.50 cent above the low of last week and the low of the year. There is a possibility that the price could slip below $1.4725 on Friday. If it holds above that level on Friday, it may decline below that level next week. There is no indication where support may be uncovered.
OUTSIDE MARKETS SUMMARY:
December corn closed down 3.25 cents per bushel at $4.2650, January soybeans closed down 13.75 cents at $11.2250 and December soybean meal closed down $4.90 per ton at $314.00. March Chicago wheat closed down 8.75 cents at $5.4075. December live cattle closed down $1.58 at $214.73. January crude oil is down $0.53 per barrel at $58.72. The Dow Jones Industrial Average is down 387 points at 45,752, with the NASDAQ down 486 points at 22,078.
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