OVERVIEW:
Class III futures strengthened in closer months as the afternoon progressed, while Class IV futures showed more weakness. October class prices declined in all categories from September. The Global Dairy Trade auction trade-weighted average declined 2.4% from the previous event.
MILK:
The divergence of Class III milk futures prices was meaningless as far as market direction is concerned. Trading activity was confined to traders trying to scalp the market to hopefully make a profit. The USDA released the October Federal Order class prices. The Class II price is $16.02, down $1.37 from September and down $4.99 from October 2024. The Class III price is $16.91, down $0.68 from September and down $5.94 from a year ago. The Class IV price is $14.30, down $1,87 from September and down $6.80 from October 2024. The Global Dairy Trade auction was held on Tuesday and showed the trade-weighted average down 2.4%. This is the sixth consecutive decline for the event. There were 39,508 metric tons sold at an average price of $3,768 per metric ton. Anhydrous milk fat declined 1.9% to $6,887 per metric ton or $3.12 per pound. The butter price declined 4.3% to $6,371 per metric ton or $2.89 per pound. Buttermilk powder gained 1.0% to $2,808 per metric ton or $1.27 per pound. Cheddar cheese declined 6.6% to $4,449 per metric ton or $2.02 per pound. Mozzarella gained 1.6% to $3,306 per metric ton or $1.50 per pound. Skim milk powder remained unchanged at $3,550 per metric ton or $1.16 per pound. Whole milk powder declined 2.7% to $3,503 per metric ton or $1.59 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.99 |
| 6 Month: | $16.83 |
| 9 Month: | $16.91 |
| 12 Month: | $17.08 |
CHEESE:
Cheese demand is reported as steady, but in the Central region, it is considered to be lighter than a year ago. Prices are low enough to stimulate buying interest, but those lower prices are not being reflected in the grocery stores. Many cheese plants report that they are receiving sufficient milk from regular suppliers, reducing the need to purchase from the spot market. This has resulted in spot milk prices ranging from $2.00 under to $1.50 over class.
BUTTER:
The price has not been able to find support. Whether buyers may step up to the plate at any time is uncertain. If they do step up to purchase more aggressively, the strength may be short-lived based on the current fundamentals. Demand for cream is increasing for the production of Class II products in preparation for the holidays.
OUTSIDE MARKETS SUMMARY:
December corn closed up 3.75 cents per bushel at $4.3525, January soybeans closed up 12.75 cents at $11.3425 and December soybean meal closed up $7.40 per ton at $324.80. December Chicago wheat closed up 4.50 cents at $5.5475. December live cattle closed down $7.25 at $220.53. December crude oil is down $0.93 per barrel at $59.63. The Dow Jones Industrial Average is up 226 points at 47,311, with the NASDAQ up 151 points at 23,500.
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