GENERAL OVERVIEW:
Milk futures were hit hard today, with substantial losses seen throughout Class III and Class IV contracts. The Global Dairy Trade auction trade-weighted average declined 3.0% from the previous event. The December advanced Class I price increased from November.
MILK:
Milk futures were hit hard today with double-digit losses in most contracts. The pressure on Class III futures was from the disappointment that block cheese did not show further gains, and the pressure from the decline in the butter price. Class IV futures fell because of the decline of both butter and nonfat dry milk. The Federal Order advanced Class I price for December was $18.2, an increase of $1.46 from November. This price was $3.22 lower than December 2024. The Global Dairy Trade auction trade-weighted average declined 3.0% from the previous event. This is the seventh consecutive decline. There were 38,612 metric tons sold at an average of $3,678 per ton. Anhydrous milk fat declined 5.0% to $6,543 per metric ton or $2.97 per pound. Butter fell 7.6% to $5,886 per metric ton or $2.67 per pound. Cheddar cheese declined 2.7% to $4,328 per metric ton or $1.96 per pound. Skim milk powder declined 0.6% to $2,542 per metric ton or $1.14 per pound. Whole milk powder declined 1.9% to $3,452 per metric ton or $1.57 per pound. Mozzarella declined 2.8% to $3,214 per metric ton or $1.46 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.51 |
| 6 Month: | $16.36 |
| 9 Month: | $16.57 |
| 12 Month: | $16.79 |
CHEESE:
Traders were disappointed that the block cheese price could not increase further. The price has not been able to regain the losses of last week to move back above the bottom of the range of $1.5750. Cheese plants are running on full production schedules with spot milk available at higher than usual during this time of year.
BUTTER:
The price may retest the low of $1.47 before the end of the week. The weakness is setting the bearishness in futures, as many times butter is the barometer of the cheese market. Retail demand has improved, but churns are operating seven days a week.
OUTSIDE MARKETS SUMMARY:
December corn closed down 7.00 cents per bushel at $4.2975, January soybeans closed down 17.25 cents at $11.3625 and December soybean meal closed down $8.10 per ton at $318.90. March Chicago wheat closed down 9.50 cents at $5.4950. December live cattle closed down $3.73 at $216.30. January crude oil is down $1.42 per barrel at $59.25. The Dow Jones Industrial Average is up 47 points at 46,139, with the NASDAQ up 131 points at 22,564.
