GENERAL OVERVIEW:
Class III futures were mixed but mostly lower. The slight weakness of the block cheese price, with no buyers showing up to the spot market, maintained a negative tone. Class IV futures extended their gains.
MILK:
Trading volume was moderate in Class III futures with contracts mixed, but mostly lower. No buyers showed up during spot cheese trading, which added to the slight negativity of the market. With fundamentals remaining much the same as they have been over the past weeks, there is little to generate much volatility in milk futures. It was a little surprising that there were over 700 contracts traded as futures moved only 24 cents from high to low. Class IV futures did not experience much volatility, but the contracts that traded posted higher prices. The September Class IV contract is nearly $2.00 over the September Class III contract. It was only a couple of weeks ago that they were nearly at the same price. Milk production across the country is sufficient for demand from bottling and manufacturing. Spot milk is less available as more is moving to bottling for school accounts.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.06 |
| 6 Month: | $17.24 |
| 9 Month: | $17.31 |
| 12 Month: | $17.46 |
CHEESE:
Mixed cheese prices today kept concern over the potential for prices moving forward.
Cheese production is steady and sufficient for demand. Increased buying from packagers and recutters generally increases during this time of year. However, buyers may have sufficient supplies readily available to them that may limit their need to be aggressive.
BUTTER:
The bounce in butter today is the result of doing regular business. There is little reason to indicate a change in trend as supplies remain sufficient. There continue to be willing sellers as there has been a substantial volume of uncovered offers remaining at the close of spot trading for some weeks.
OUTSIDE MARKETS SUMMARY:
December corn closed up 6.25 cents per bushel at $4.8950, November soybeans closed up 23.50 cents at $12.1600, and December soybean meal closed up $2.40 per ton at $318.70. September Chicago wheat closed steady at $6.7475, and October live cattle closed down $0.10 at $218.78. September crude oil is up $2.10 per barrel at $84.50. The Dow Jones Industrial Average is down 273 points at 53,460, with the NASDAQ down 84 points at 26,645.
