GENERAL OVERVIEW:
Milk futures closed substantially higher. This was unexplained for Class III futures as spot cheese prices declined. However, the strength was warranted in Class IV futures because the spot butter price jumped. It is uncertain whether the income over feed price will trigger a DMC payment.
MILK:
It was a strong end to the week and month for milk futures. The strength in Class III futures was not expected due to the weakness of spot cheese prices. However, the strength in Class IV futures was not surprising due to the strength in butter and nonfat dry milk. The nonfat dry milk price increased substantially this week, lending quite a bit of support to milk futures.
The December Agricultural Prices report was released today. It is uncertain whether the price movement between the All-milk price and feed prices is sufficient to trigger a Dairy Margin Coverage payment. The average corn price was $4.10 per bushel, up $0.12 from November. This is $0.13 lower than December 2024. The Premium/Supreme hay price was $211.00 per ton, down $5.00 per ton from November and down $19.00 per ton from a year ago. The All-milk price was $19.00 per cwt, down $0.70 from November and down $4.30 from a year ago. The average soybean meal price will be released on Monday by the FSA. Other prices to take note of, but are not used in the calculation, are the alfalfa hay price, which was $161.00 per ton, up $2.00 per ton from a year ago, but down $3.00 per ton from November 2024. The average soybean price was $10.40 per bushel, down $0.10 per bushel from November but up $0.61 from December 2024.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.55 |
| 6 Month: | $16.40 |
| 9 Month: | $16.88 |
| 12 Month: | $17.10 |
CHEESE:
For the week, blocks increased 0.75 cent with 20 loads traded. The weekly average price is $1.3940. Barrels increased 3.00 cents with two loads traded. The weekly average price is $1.4280. Dry whey increased 1.50 cents with five loads traded. The weekly average price is 74.50 cents.
BUTTER:
For the week, butter increased 0.50 cent with 39 loads traded. The weekly average price is $1.55470. There was much volatility during the week, but not much price change for the week. Grade A nonfat dry milk jumped 13.50 cents with four loads traded. The weekly average price is $1.3895. This may be the largest price increase ever seen over the period of one week. This strength added a lot of support to Class IV futures.
OUTSIDE MARKETS SUMMARY:
March corn closed down 2.50 cents per bushel at $4.2825, March soybeans closed down 8.00 cents at $10.6425, and March soybean meal closed down $2.40 per ton at $293.60. March Chicago wheat closed down 3.50 cents at $5.3800. April live cattle closed down $0.48 at $236.80. March crude oil is down $0.21 per barrel at $65.21. The Dow Jones Industrial Average is down 189 points at 48,892, with the NASDAQ down 223 points at 23,462.
