GENERAL OVERVIEW:
Class III futures held fairly well today, but some contracts were posting double-digit losses. The market may see another washout if there is another day of lower spot prices. Wednesday is the last trading day of the week.
MILK:
There is continued pressure on milk futures due to the inability of the underlying spot prices to find a bottom. One has to wonder how low prices will move before the weakness runs its course. Farms are having a tough time with cash flow, and it looks like it is going to get worse before getting better. We have seen times like this before, but it is difficult during those times. The one thing that needs to be realized is that the market does not respect people, and it will move relative to supply and demand. However, some outside factors have had a substantial impact on the market this time. I have written about it before, but the beef-on-dairy phenomenon has created another factor that has moved the market outside of the usual fundamentals of supply and demand. Wednesday is the last day of trade for this week. Both the spot markets and the futures markets will be closed on Thursday and Friday.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.12 |
| 6 Month: | $15.92 |
| 9 Month: | $16.16 |
| 12 Month: | $16.47 |
CHEESE:
The block cheese price continues to decline as buyers hold back, and sellers continue to move supply. It is possible that inventory has not declined seasonally as it usually does, which is putting pressure on the market. Without the cold storage reports to provide some idea of the level of inventory, we can only guess that the inventory remains large, with sellers wanting to limit the build through the end of the year.
BUTTER:
The price continues to fall, with the price now just 22 cents from the low in 2021. We certainly hope the price does not fall to that level, but there is no indication of a level of support.
OUTSIDE MARKETS SUMMARY:
December corn closed down 0.25 cent per bushel at $4.2350, January soybeans closed up 1.50 cents at $11.2475, and January soybean meal closed up $2.10 per ton at $320.40. March Chicago wheat closed up 4.50 cents at $5.3925. February live cattle closed down $0.20 at $207.33. January crude oil is down $0.74 per barrel at $58.10. The Dow Jones Industrial Average is up 664 points at 47,112, with the NASDAQ up 154 points at 23.026.
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