GENERAL OVERVIEW:
Class III futures lost what was gained over the past three days. The minor strength in dry whey should have provided some support, but the focus was on the steady cheese prices. Butter continued to struggle with buyers holding for lower prices, while sellers were rewarding it.
MILK:
Class III futures continue to have difficulty maintaining strength. The minor strength in dry whey should have provided some support, but the focus was on the steady cheese prices. The inability of prices to increase reinforces the idea that the upside price potential seems limited and prices will remain choppy. There was more volatility today, but trading volume was low. The recent movement of the market has sidelined some traders as it has been difficult to even scalp the market. USDA will release the World Agricultural Supply and Demand report on Wednesday. The main focus will be on the projections for grain production and yield per acre. The report will also contain USDA's estimates for milk production, milk prices, and dairy product prices. The past two reports showed a substantial increase in estimated milk production. The increase is not expected to be as great as the past two months, but it is expected to show an increase in estimated milk output.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.06 |
| 6 Month: | $17.27 |
| 9 Month: | $17.34 |
| 12 Month: | $17.46 |
CHEESE:
The spot cheese trading period was void of any interest today. No buyers or sellers showed up to do any business. Likely, the bearish aspect of that was that no buyers wanted anything. Traders focused on the lack of interest. Cheese production remains strong and will continue to do so even with more milk moving to bottling.
BUTTER:
The butter price remains in a choppy downtrend. Manufacturers continue to have sufficient supplies to move to the market. Production is meeting demand without difficulty. Cream has tightened in some areas, but overall remains sufficient for demand.
OUTSIDE MARKETS SUMMARY:
December corn closed down 1.25 cents per bushel at $4.6050, November soybeans closed down 10.75 cents at $11.6875 and December soybean meal closed down $.70 per ton at $310.90. September Chicago wheat closed down 10.25 cents at $6.3025. October live cattle closed down $0.58 at $226.33. September crude oil is up $1.26 per barrel at $83.39. The Dow Jones Industrial Average is down 184 points at 53,792, with the NASDAQ down 160 points at 26,445.
