Monday Closing Dairy Market Update - Milk Futures End Higher

MILK:

Class III milk futures were 45 cents to 75 cents higher at the end of the day, with the help of increased spot cheese prices. Class IV futures saw slighter upticks, closing 2 to 5 cents higher. Milk supply is tight due to stronger Class I pulls and lower seasonal milk production. Hurricane Ida made a huge impact on production in Florida as plants closed early in preparation. Even delivering bottled milk was put on hold. Stock in milk products was depleted at grocery stores as well.

AVERAGE CLASS III PRICES:

3 Month:	$21.52
6 Month:	$21.04
9 Month:	$20.82
12 Month:	$20.73

CHEESE:

Spot block and barrels closed today with positive price changes. Blocks moved up 3.25 cents to the $2 mark, while barrels were only up a penny to $2.2100. Dry whey remained at $0.4400. There wasn't much trading activity. Cheese demand is declining in retail and food service sectors due to higher prices. Consumers are tending to change their desired brands or switch to different alternatives. International demand is strong. Cheese loads are available for spot purchasing.

BUTTER:

Spot butter jumped 3.25 cents, closing at $3.1775 with 11 loads traded. Tighter inventory is contributing to the higher market prices. There is a strong pull for cream to be used into more cream cheese and eggnog production, and butter makers are opting to sell over churning. The latest Cold Storage report noted that inventory was down 10% from the previous month. Grade A nonfat dry milk declined 2.75 cents, closing at $1.5425 with one load traded.

OUTSIDE MARKETS SUMMARY:

December corn gained 3.25 cents closing at $6.8075 per bushel. November soybeans increased 9.25 cents to settle at $13.7400 per bushel, with October soybean meal up $2.40 ending at $405.60 per ton. December wheat fell 9.50 cents closing at $9.1200 per bushel. October live cattle was up $1.05 ending at $144.325. November crude oil increased $3.85 closing at $83.34 per barrel. The DOW rose 765 points closing at 29,490 while the NASDAQ increased 239 points closing at 10,815 points.

Monday Midday Dairy Market Summary - Class III Futures Rise

OUTSIDE MARKETS SUMMARY:

CORN:	2.25 Higher
SOYBEANS:	8.50 Higher
SOYBEAN MEAL:	$0.90 Higher
LIVE CATTLE:	$1.50 Higher
DOW JONES:	725 Points Higher
NASDAQ:	219 Points Higher
CRUDE OIL:	$1.24 Lower

MIDDAY MARKET UPDATE:

Block cheese price increased 3.25 cents to $2.0000 with one load traded. Barrels were up a penny to $2.2100 with one load traded. Class III milk futures were a penny less to 61 cents higher thanks to the increase in cheese prices. Butter price increased 3.25 cents to $3.1775 with 11 loads traded. Nonfat dry milk declined 2.75 cents to close at $1.5425 with one load traded. Dry whey was unchanged at 44 cents with no loads traded. Class IV milk futures held steady. Butter futures 50 cents less to 1.15 higher. Dry whey futures were unchanged to 50 cents higher. The latest Dairy Products report will be released Tuesday.

Monday Morning Dairy Market Update - Limited Volatility Expected

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	5 to 7 Higher
Soybean Futures:	Mixed
Soybean Meal Futures:	Mixed
Wheat Futures:	8 to 11 Higher

MILK:

Milk futures are trying to move higher but continue to run into headwinds as spot prices continue to fluctuate without trending higher seasonally. There is sufficient milk for demand. There is no concern over supply tightness, even though butter price is much higher, and stocks are lower than a year ago. Cheese supplies are plentiful. Milk receipts at some plants are beginning to increase as the low point of production seems to have been reached. Margins may be squeezed as the Quarterly Grain Stocks report on Friday was bullish to corn. Hay prices continue to escalate with premium/supreme increase $10.00 per ton in August. With price this high at this time of year, it is likely to continue to increase through the winter. The alfalfa hay price actually declined $1.00 per ton from July, making that category more reasonable but less desirable for milk production.

CHEESE:

Prices are expected to be choppy this week as buyers and sellers accomplish business. Much of the business is being done on an as-needed basis rather than increasing supply for possible demand. Overall demand is in question through the end of the year as retail prices are higher not only for dairy products but all groceries.

BUTTER:

Butter remains in a range at a rather high level. This is not expected to change much in the near term. The concern is whether high prices will impact overall demand, especially after holiday buying is finished. Exports have remained strong but may slow due to the high value of the U.S dollar. However, it will take time for inventory to increase to a more comfortable level.