GENERAL OVERVIEW:
Class III futures held up surprisingly well again today despite significant declines in the cheese prices. The November class prices were released with Classes II and IV declining and Class III increasing from the previous month. The Global Dairy Trade auction trade-weighted average declined 4.3%.
MILK:
Class III milk futures held surprisingly well, with most contracts closing higher despite the significant decline of the spot cheese prices again. It gives the impression that traders may believe the bottom is nearby. Of course, there is no indication of that based on the negative fundamentals. The USDA released the Federal Order class prices for November. The Class II price is $14.54, down $1.48 from October and $6.98 below November 2024. The Class III price is $17.18, up $0.27 from October, but down $2.77 from a year ago. The Class IV price is $13.89, down $0.41 from October and $7.23 lower than November 2024. The Global Dairy Trade auction trade-weighted average fell 4.3% and was the eighth consecutive event posting a decline. There were 34,282 metric tons sold at an average price of $3,507. Anhydrous milk fat fell 9.8% to $5,902 per metric ton or $2.68 per pound. Butter fell 12.4% to $5,169 per metric ton or $2.34 per pound. Buttermilk powder gained 1.8% to $2,903 per metric ton or $1.32 per pound. Cheddar cheese jumped 7.2% to $4,639 per metric ton or $2.10 per pound. Lactose gained 4.2% to $1.250 per metric ton or $0.57 per pound. Skim milk powder declined 1.6% to $2,498 per metric ton or $1.13 per pound. Whole milk powder declined 2/4% to $3,364 per metric ton or $1.53 per pound. Mozzarella declined 1.0% to $1.44 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.61 |
| 6 Month: | $15.87 |
| 9 Month: | $16.26 |
| 12 Month: | $16.56 |
CHEESE:
Spot cheese prices remain unable to find a bottom as buyers continue to hold back on their purchases due to plentiful supplies. The one consolation is that prices have been this low in early 2024, from which prices rallied substantially. Fundamentals are different, but low prices cure low prices. Hopefully, there will be some rebound.
BUTTER:
The butter price seems to have found some stability, but whether that might continue is anyone's guess. The potential for increased butter production after the holiday season is likely, as cream demand from other Class II products slows. The increase in holiday demand is providing some support.
OUTSIDE MARKETS SUMMARY:
March corn closed down 6.50 cents per bushel at $4.4350, January soybeans closed down 9.00 cents at $11.1575 and January soybean meal closed down $.30 per ton at $311.30. March Chicago wheat closed down 2.75 cents at $5.3825. February live cattle closed up $1.10 at $221.90. January crude oil is up $0.31 per barrel at $58.95. The Dow Jones Industrial Average is up 408 points at 47,883, with the NASDAQ up 40 points at 23,454.
