GENERAL OVERVIEW:
It has been a strong start to the week as nearly every category of dairy products is trading higher going into the evening. The spot market has brought in additional demand as the calendar inches closer to the holidays.
MILK:
Class III milk futures are anywhere from 6 cents higher on the October contract to 45 cents higher on the more heavily traded November contract. Class IV futures are also rallying into the close, trading anywhere from 45 to 62 cents higher. With last Friday's outlook report released by USDA, production forecasts were down from last month's outlook report by 0.3 billion pounds of milk. While this seems like a big drop, it is still a total of 236.9 billion pounds in 2026, one of the highest productions forecasted that the U.S. has ever produced. The main focus of demand has been in higher-value protein products which have had a tighter supply with much of the fluid milk being sent to bottling.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.81 |
| 6 Month: | $17.12 |
| 9 Month: | $17.28 |
| 12 Month: | $17.41 |
CHEESE:
Cheese continued the strength seem last week in the spot market which has been reflected in the futures market. Today, futures closed 0.7 to 4.1 cents higher. Buyers have been stocking up for upcoming holiday demand, and it has created a short-term buying frenzy trying to get their hands on supply. Some of the price actions the market has seen this month could be considered a rebound from a tough September. The next cold storage report will be a better indicator of the state of cheese available to the market and if this price strength continues.
BUTTER:
Butter futures were a bit disappointing towards the end of the trading day as the November contract settled 4 cents off the midday high of the day. Cash trade was higher today, but the actual loads traded were still minimal. Buyers have been stepping in to buy spot loads over the last week because prices were low and the holiday baking season is around the corner. What hasn't changed is the availability of cream which is still plentiful. Fundamentally, butter has some strong resistance to a long-term price increase.
OUTSIDE MARKETS SUMMARY:
December corn closed down 7.25 cents per bushel at $4.670; November soybeans closed down 7.75 cents at $12.5350 and December soybean meal closed down $2.30 per ton at $354.80. December Chicago wheat closed down 5.25 cents at $6.5525.
December live cattle closed down $0.325 at $228.025. November crude oil is up $2.25 per barrel at $103.66. The Dow Jones Industrial Average is down 36 points at 51,966 and the NASDAQ is up 290 points at 26,430.
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