GENERAL OVERVIEW:
A positive day for both Class III and Class IV futures. There was no specific fundamental reason for the strength, other than the underlying cash prices did not go lower.
MILK:
Both Class III and Class IV futures increased, with numerous contracts posting double-digit gains. Traders will be cautious as the cheese price did not increase, but steady prices gave confidence for traders to buy into the market for a short-term profit on the futures increases. Follow-through buying on Friday might be met with selling into the weekend unless support is seen from higher cash prices. Regional reports indicate the milk supply is tightening as demand has improved. This will likely be temporary and seasonal unless demand remains stronger due to low prices. Milk production is not expected to decline anytime soon. Increased culling may have a longer-term impact on milk production, but the milk supply will be plentiful and higher than a year ago for some time.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.71 |
| 6 Month: | $15.99 |
| 9 Month: | $16.37 |
| 12 Month: | $16.65 |
CHEESE:
There has been a large recall of more than 260,000 cases of shredded cheese that have been sold in 31 states and Puerto Rico. It is reported that the cheese might contain metal fragments, according to FDA. The various cheeses were from Great Lakes Cheese Co. The cheese products are sold under private store-brand labels at several retailers, including Target, Walmart and Aldi. The types of cheese are mozzarella, Italian style, pizza style, mozzarella and provolone, and mozzarella and parmesan. Things like this are unfortunate but do happen at times. That is why there are policies in place for the safety of consumers.
BUTTER:
Churning is active with many plants running seven days per week. Cream is being purchased from the spot market to keep up with demand. This provides current support for the spot market. There is concern that once holiday demand is met, the price could fall back again. However, the low price may stimulate greater demand.
OUTSIDE MARKETS SUMMARY:
March corn closed up 3.75 cents per bushel at $4.4725, January soybeans closed up 3.75 cents at $11.1950 and January soybean meal closed down $.10 per ton at $311.20. March Chicago wheat closed up 2.00 cents at $5.4025. February live cattle closed up $2.10 at $224.00. January crude oil is up $0.78 per barrel at $59.73. The Dow Jones Industrial Average is down 32 points at 47,85, with the NASDAQ is up 51 points at 23,505.
