GENERAL OVERVIEW:
This morning USDA announced a plan to purchase $472.5 million of American-grown, American-produced food to help support farmers and those in need of food. $165.5 million was allocated for dairy purchases. Secretary Rollins says this will take American milk and cheese straight from our farms to those in need rather than being wasted.
MILK:
Class III futures exhibited some major price divergence today as the November contract was trading over 40 cents lower this afternoon while December and beyond were trading as much as 20 cents higher. Class IV traded similarly with November trading as much as 21 cents lower this afternoon while the January contract was 45 cents higher. The announcement released this morning for the USDA to purchase American grown food products gave new hope to milk and cheese futures as the last time a similar program was implemented, it successfully boosted the market. The "Farmers to Families Food Box" program in 2020-2021 provided fresh produce, dairy, cooked meats and seafood valued at over $5 billion to needy Americans. While this is significantly less of an investment, it still should help with dairy product utilization. Nonfat Dry Milk is the biggest market mover today with most contracts trading 4 cents higher, the current limit for daily trade. Strength was due to spot market moving 4.7 cents higher.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.78 |
| 6 Month: | $16.75 |
| 9 Month: | $16.87 |
| 12 Month: | $17.08 |
CHEESE:
The spot market experienced the first day of lower priced trade for cheddar cheese blocks of the week, trading 1 cent lower than yesterday. Cheese futures, much like we see in milk futures are lower on the nearby contracts this afternoon with the November down 3.9 cents near the end of the day and the January 2.2 cents higher. Some of the deferred strength could be accounted for the announcement for dairy product purchases to come for needy Americans.
BUTTER:
Butter also received a boost from the spot market today, which closed 3.5 cents higher. Futures have responded positively with the afternoon trade up 0.875 cents on the November board month. Nearby seasonal baking demand is suspected for current strength.
OUTSIDE MARKETS SUMMARY:
December corn closed down .50 cent per bushel at $4.5125, January soybeans closed down 3.25 cents at $12.3475 and December soybean meal closed down $6.40 per ton at $329.30. December Chicago wheat closed up 4.75 cents at $6.0375.
December live cattle closed down $1.03 at $226.30. December crude oil is down .78 per barrel at $102.00. The Dow Jones Industrial Average is down 132 points at 52,342 and NASDAQ is down 365 points at 26,184.
