GENERAL OVERVIEW:
Class III milk futures were mostly lower, with traders seeing limited volatility. Trading volume was light. Class IV futures only showed trading activity in the January contract.
MILK:
Milk futures closed about as expected, with Class III mostly lower and Class IV higher. Milk volumes are increasing in much of the country as weather has become cooler. Corn silage harvest is either complete or ongoing, with many indicating good tonnage. There has been little indication of any slowing of milk production due to an increase in culling. The milk production and livestock slaughter report will provide a good indication of the direction of the market for the rest of the year. The anticipation is that the increase in cow numbers will slow as low milk prices may increase the culling of lower producers and reduce the desire to pay higher prices for replacements. However, it may take some time before that will be evident, much less tightening the milk supply.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.04 |
| 6 Month: | $16.31 |
| 9 Month: | $16.60 |
| 12 Month: | $16.82 |
CHEESE:
The milk supply has reportedly tightened somewhat this week. However, it has not had much impact on spot milk prices. Spot milk is flat to $2.00 over class, which is lower than usual during this time of year. Manufacturing plants are running on full schedules. Spot cheese is readily available, leaving buyers unaggressive in the market.
BUTTER:
Butter production is steady to higher as ice cream production winds down and more cream is available to the market. Domestic butter supplies are ample for demand. Many butter plants are now running on six-day weeks.
OUTSIDE MARKETS SUMMARY:
December corn closed down 1.50 cents per bushel at $5.3425, November soybeans closed up 1.75 cents at $13.2050, and December soybean meal closed up $.20 per ton at $365.60. December Chicago wheat closed up 2.25 cents at $7.3075. December live cattle closed down $3.15 at $220.20. October crude oil is down $3.76 per barrel at $102.07. The Dow Jones Industrial Average is down 631 points at 51,462, with the NASDAQ down 3 points at 25,978.
