GENERAL OVERVIEW:
USDA released the WASDE report Tuesday with higher projected prices for cheese, nonfat dry milk (NDM), dry whey and higher milk prices across the classes. Butter was the only product left out on the optimistic projections.
MILK:
Class III futures found strength Wednesday spurred from a positive day in the cheese market. While we are still seeing weakness in the front month, the November contract managed to settle 2 cents higher while the deferred months had a much more dramatic rally, increasing as much as 55 cents in Wednesday afternoon's trade.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.40 |
| 6 Month: | $17.24 |
| 9 Month: | $17.31 |
| 12 Month: | $17.44 |
CHEESE:
The spot market was friendly for cheese prices Wednesday as cheddar blocks climbed 5.5 cents with only one load traded. There was only a single bid left unfilled at the close, so a lighter volume of participants than seen recently. Cheddar cheese barrels traded for the first time this week, falling 1.5 cents, closing the gap between blocks and barrels to only a 50-cent spread currently. Cheese futures responded well to the strength in the cash market. Prices settled anywhere from only up 0.3 cents in the prompt month to 3.7 cents higher on the December contract.
BUTTER:
Butter weakness continued Wednesday as the spot market dropped 0.75 cents with 34 offers left unfilled at the close and no buyers available. Futures saw similar losses trading unchanged to 1 cent lower. Holiday baking season is slowly bringing buyers to fill inventories, yet the pace is behind schedule for what is normal this far into November. Unseasonably warm weather in parts of the country could be to blame for the delay.
OUTSIDE MARKETS SUMMARY:
December corn closed down 1.00 cent per bushel at $4.4800, January soybeans closed up 2.75 cents at $12.3075 and December soybean meal closed up $3.20 per ton at $329.70. December Chicago wheat closed up 6.75 cents at $5.9950.
December live cattle closed down $0.23 at $218.98. December crude oil is up .39 per barrel at $86.43. The Dow Jones Industrial Average is up 254 points at 52,486 and the NASDAQ is up 400 points at 25,466.
