GENERAL OVERVIEW:
Most milk futures contracts closed lower despite the strength in the cheese and dry whey spot prices. Barrels have been showing more price movement and trading activity recently as demand improves and sellers are willing to move some supplies.
MILK:
It was another one of those days in which one would have thought Class III milk prices would have been higher. The strength in the cheese and dry whey prices should have provided further support. However, the increases of the past few days have already factored in the strength, resulting in traders who had previously bought into the market taking profits. This has been a pattern for quite some time, as much of the trading that is being done is short-term trading. Further weakness could unfold as selling generally takes place over two days before traders step back into the market in an attempt to trade market movement. The market sentiment seems to have turned somewhat bullish as buyer interest in cheese seems to be improving.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.70 |
| 6 Month: | $17.23 |
| 9 Month: | $17.29 |
| 12 Month: | $17.33 |
CHEESE:
There has been more trading activity in barrels recently as buyers and sellers are willing to do more business on the spot market. For quite some time, there had been very little spot trading activity. Some of that limited activity was the result of the barrel price being removed from the Federal Order price calculation. It is uncertain as to why this was the case, but it seemed buyers and sellers were accomplishing their business outside of the daily spot market.
BUTTER:
The volatility of butter has declined substantially over the past two weeks. This indicates that current supply and demand seem to be balanced. Buyers have not had to aggressively bid for supplies. Sufficient butter is available through other channels.
OUTSIDE MARKETS SUMMARY:
December corn closed down 2.75 cents per bushel at $4.6050, November soybeans closed down 3.75 cents at $11.9100, and December soybean meal closed up $1.30 per ton at $316.30. September Chicago wheat closed up 9.75 cents at $6.4500. August live cattle closed down $3.30 at $231.43. August crude oil is up $1.20 per barrel at $79.34. The Dow Jones Industrial Average is up 10 points at 52,508, with the NASDAQ up 234 points at 26,107.
