GENERAL OVERVIEW:
Class IV futures gained back much of what had been lost on Monday as the market continues with choppy trade. This has been the pattern, and it is expected to continue. Increasing fluid demand due to the reopening of schools is not tightening the supply of milk for manufacturing.
MILK:
There is no shortage of milk. The spot milk supply is tight in some areas, resulting in prices above class, but it is still available for those who need to purchase extra supply from the spot market. Cooler weather is improving cow comfort and thereby increasing milk output. So far, increasing demand has been met without difficulty. Seasonal buying should increase at this time of year as buyers look ahead to fall and holiday demand. So far, increased buying has been met with sufficient supplies. Canada reciprocated with retaliatory tariffs on about $20 billion worth of American goods, including steel, dairy products, appliances, and farm equipment, as a result of the 50% tariffs put on Canadian goods on Monday. The impact this will have on dairy prices is uncertain, but it certainly will have some impact on dairy trade with Canada.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.59 |
| 6 Month: | $16.88 |
| 9 Month: | $17.05 |
| 12 Month: | $17.20 |
CHEESE:
The cheese prices are stuck. There is little reason for prices to increase if there is sufficient supply to meet demand. Inventory is in line with a year ago, leaving supply and demand balanced. Cheese production remains steady as milk receipts improve.
BUTTER:
The butter price continues to chop around, with the overall price remaining in a downtrend. Manufacturers continue to offer substantial volumes of butter on the daily spot market. This keeps the upside price potential limited as buyers see little reason to be aggressive except when needing to fill immediate orders. There is no near-term concern over supply.
OUTSIDE MARKETS SUMMARY:
December corn closed up 8.00 cents per bushel at $5.2350, November soybeans closed up 13.50 cents at $12.3775, and December soybean meal closed up $.60 per ton at $329.20. December Chicago wheat closed up 3.75 cents at $7.0325. October live cattle closed down $2.65 at $210.95. October crude oil is down $3.93 per barrel at $81.08. The Dow Jones Industrial Average is up 160 points at 53,577, with the NASDAQ up 171 points at 26,151.
