GENERAL OVERVIEW:
It was a very strong day for milk futures, with Class IV contracts outpacing Class III. The Global Dairy Trade auction trade-weighted average jumped 6.7%. The December Federal Order class prices declined from the previous month.
MILK:
Milk futures moved substantially higher, with Class IV contracts outpacing Class III. The increase in butter supported the market, but the strength of nonfat dry milk pushed the April Class IV contract as much as 95 cents higher. The April through December contracts moved over $18.00, where they have not been since early September 2025. The January Federal Order class price was released. The Class II price is $13.92, down $0.42 from December and down $7.66 from January 2025. The Class III price is $14.59, down $1.27 from December and down $5.75 from a year ago. The Class IV price is $13.55, down $0.09 from December and $7.18 lower than January 2025. The Global Dairy Trade auction took place on Tuesday. The trade-weighted average jumped 6.7%. Anhydrous milk fat increased 5.0% to $6,524 per metric ton or $2.96 per pound; butter jumped 8.8% to $5,773 per metric ton or $2.62 per pound; buttermilk powder increased 6.4% to $3,147 per metric ton or $1.43 per pound; cheddar cheese increased 3.8% to $4,772 per metric ton or $2.17 per pound; lactose increased 1.5% to $1,410 per metric ton or $0.64 per pound; mozzarella cheese jumped 10.6% to $2,874 to $1.30 per pound; skim milk powder increased 5.3% to $1.64 per pound or $1.31 per pound; and whole milk powder increased 5.3% to $3,614 per metric ton or $1.64 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.59 |
| 6 Month: | $17.21 |
| 9 Month: | $17.49 |
| 12 Month: | $17.51 |
CHEESE:
Cheese continues to find some support. The
extent of further gains is uncertain. However, it seems that the
attitude of traders has turned more supportive of higher prices. The
December Dairy Products report will be released on Thursday.
BUTTER:
The butter price moved to the highest level since Oct. 31, 2025. This market seems to have found solid support. Higher prices are expected in the near term.
OUTSIDE MARKETS SUMMARY:
March corn closed up 1.00 cent per bushel at $4.2950, March soybeans closed up 26.50 cents at $10.9225 and March soybean meal closed up $4.30 per ton at $296.20. March Chicago wheat closed down 2.00 cents at $5.2675. April live cattle closed up $0.18 at $241.80. March crude oil is up $1.93 per barrel at $65.14. The Dow Jones Industrial Average is up 260 points at 49,501, with the NASDAQ down 351 points at 22,905.
