GENERAL OVERVIEW:
Class III futures were up sharply after spot cheese trading took place. However, the strength quickly ran its course with contracts dropping back. Class IV futures held their ground with most contracts closing at or near the highs. Dairy exports in November were significantly higher.
MILK:
Class III milk futures moved significantly higher after the spot block cheese price increased. However, the exuberance ran its course with contracts falling back significantly from their highs. Class IV futures remained strong as both butter and nonfat dry milk increased. The March contract reached $19.00 but slipped back. It seems that much of the buying interest is due to buyers wanting to increase ownership at the lowest prices they can, which has resulted in higher prices as they outbid each other. I am not trying to be bearish on the market, but caution needs to be exercised as the fundamentals do not suggest there may be much upside potential for the market. Global dairy prices have been strengthening and increasing the desire to buy in case prices find further support. Dairy exports in November increased 14% from November 2024 in milk solids equivalents. The value of dairy exports totaled $801.7 million, with the year-to-date value reaching $8.82 billion. The USDA will release the January Milk Production report on Friday. I estimate milk production to be up 4.2% from the previous year. I estimate cow numbers to be up 4,000 head from December.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.42 |
| 6 Month: | $17.17 |
| 9 Month: | $17.50 |
| 12 Month: | $17.52 |
CHEESE:
Cheese exports have been strong all year, with
November exports totaling 50,775 metric tons, up 28% from the previous
year. Year-to-date exports are 20% above the same period in 2024.
BUTTER:
Butterfat exports have been phenomenal all year, with November exports exceptional. Exports totaled 15,308 metric tons. This was an increase of 227.0% from November 2024. Year-to-date exports are 157% higher than in the same period in 2024.
OUTSIDE MARKETS SUMMARY:
March corn closed down 1.25 cents per bushel at $4.2575, March soybeans closed up 7.50 cents at $11.4100, and March soybean meal closed up $.90 per ton at $304.80. May Chicago wheat closed up 14.25 cents at $5.6675. April live cattle closed up $0.90 at $243.43. April crude oil is up 1.35 per barrel at $66.40. The Dow Jones Industrial Average is down 268 points at 49,395, with the NASDAQ down 71 points at 22,683.
