GENERAL OVERVIEW:
Class III futures were able to post minor gains. This was likely the result of traders making minimal profits due to limited volatility. Trading activity was very light in milk futures.
MILK:
Traders had limited movement to take advantage of. Recent previously established positions were not going to net much profit if the right direction was chosen. This may have partly been the reason for limited volatility, as traders may have decided to hold positions in the hope for a better day on Friday. The inability of underlying cash cheese and butter prices to find a bottom and sustain strength is getting old. Prices generally see strength this time of year as buyers are looking ahead to upcoming holiday demand. The fact that it is not happening now is of grave concern for what prices may do once holiday demand is satisfied. Milk output is not slowing and may not slow in the near term.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.06 |
| 6 Month: | $16.33 |
| 9 Month: | $16.63 |
| 12 Month: | $16.84 |
CHEESE:
Milk continues to move around the country to satisfy the demand for fluid milk for school accounts and to find manufacturing capacity. Manufacturing capacity is sufficient as plant expansions have taken place, but milk sometimes needs to move to where extra capacity is located. Cheese exports remain strong but have not been sufficient to tighten the domestic supply. Domestic demand has been steady to higher.
BUTTER:
The Western region reports that butter demand is somewhat weak. Retail sales are weak while demand from the food service industry is steady. International demand remains strong but will not see a strong increase over the high levels of exports in 2025. However, maintaining a strong export pace will be critical for prices over time.
OUTSIDE MARKETS SUMMARY:
December corn closed down 3.75 cents per bushel at $5.3050, November soybeans closed down .75 cent at $13.1975, and December soybean meal closed up $5.70 per ton at $371.30. December Chicago wheat closed down 3.75 cents at $7.2700. December live cattle closed down $3.95 at $216.25. October crude oil is down $1.17 per barrel at $101.26. The Dow Jones Industrial Average is up 316 points at 51,778, with the NASDAQ up 440 points at 26,418.
