GENERAL OVERVIEW:
Class III futures closed mixed, while Class IV futures closed under pressure. Cheese prices declined further than butter and nonfat dry milk, which should have put more pressure on Class III futures, but such was not the case. USDA released the Livestock Slaughter report for both September and October.
MILK:
Milk futures did not provide anything to get excited over other than Class III contracts held surprisingly well, considering the weakness of spot cheese prices. Lower milk prices are expected as spot prices are unable to find support. Milk production continues to remain significantly higher than a year ago, keeping bearish pressure on the market. A bright spot may be the increasing culling seen over the past two months. USDA updated the Livestock Slaughter report showing increased dairy cattle slaughter. September slaughter totaled 227,200 head, an increase of 9,800 head from August and 16,800 more than September 2024. October slaughter totaled 243,000 head, up 15,800 head from September and 7,400 head from October 2024. This was the highest monthly slaughter since March 2024.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.09 |
| 6 Month: | $15.92 |
| 9 Month: | $16.16 |
| 12 Month: | $16.48 |
CHEESE:
The block cheese price has yet to find a bottom, making a new low for the year during spot trading. Strong cheese production and the desire to limit and reduce inventory keep sellers offering supplies to the market. There is no thought of holding back supplies, as the potential for higher prices is not likely anytime soon. The barrel price is moving with little reason to accomplish business on the spot market.
BUTTER:
It is a concern that the butter price was not able to find further strength on the heels of the increase on Wednesday. Increased retail demand is not enough to provide greater support to the price. The cream supply for churning is not as large as it has been due to an increase in the manufacturing of other Class II products for the holiday season.
OUTSIDE MARKETS SUMMARY:
March corn closed down 2.75 cents per bushel at $4.4500, January soybeans closed down 9.75 cents at $11.2800 and January soybean meal closed down $4.10 per ton at $314.60. March Chicago wheat closed down 3.50 cents at $5.3500. February live cattle closed down $1.93 at $215.93. January crude oil is up $0.98 per barrel at $59.53. The Dow Jones Industrial Average is down 427 points at 47,289, with the NASDAQ down 90 points at 23,276.
