Wednesday Closing Dairy Market Update - September Class III Price is $17.59

OVERVIEW:

Class III nearby futures closed higher as they were supported by stronger spot cheese prices. Later contracts were mixed as traders did not want to support the futures for next year unless there was a change in trend. The August Federal Order prices were released and showed an increase in the Class III price and a decrease in Classes II and IV.

MILK:

Class III futures have rebounded around $1.00 per cwt from the lows of a week ago. This improves the outlook for milk prices, but the increase does not mean prices will remain, and the current futures prices are not much to write home about. At least the September Class III price was better than August, being announced at $17.59, up $0.35, but the price is down $5.75 per cwt from September 2024. The Class II price was announced at $17.39, down $1.79 from August and down $5.01 from a year ago. The Class IV price is $16.17, down $2.33 from August and down $6.12 from September 2024. The average soybean meal price has not been released, which is missing from the calculation of the August income over feed price. This will not be released until the government shutdown is over. There was not going to be a Dairy Margin Coverage program payment anyway, so it will not have an impact on dairy farms.

AVERAGE CLASS III PRICES:

3 Month:	$17.36
6 Month:	$17.20
9 Month:	$17.15
12 Month:	$17.23

CHEESE:

Block cheese has had three consecutive days of gains. The price is now 14.50 cents from the low that was established on September 22. Hopefully, a delayed seasonal buying event has kicked in, which will continue to support the market.

BUTTER:

The butter price may chop around at a higher level and develop a sideways trading pattern. This may build some support and limit further downside price weakness for the time being. Once buyers have met their immediate needs, they may be unwilling to remain aggressive in the market.

OUTSIDE MARKETS SUMMARY:

December corn closed up 1.00 cent per bushel at $4.1650, November soybeans closed up 11.25 cents at $10.1300 and December soybean meal closed up $.30 per ton at $273.60. December Chicago wheat closed up 1.25 cents at $5.0925. December live cattle closed down $0.28 at $234.50. November crude oil is down $0.59 per barrel at $61.78. The Dow Jones Industrial Average is up 43 points at 46,441, with the NASDAQ up 95 points at 22,755.

Wednesday Midday Dairy Market Summary - Cheese Prices Continue Higher

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$3.70 Lower
LIVE CATTLE:	$0.07 Lower
DOW JONES:	1657 Points Lower
NASDAQ:	805 Points Lower
CRUDE OIL:	$0.49 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 3.50 cents, closing at $1.7550 with two loads traded. The barrel cheese price increased 3.50 cents, closing at $1.7250 with no loads traded. There was an unfilled bid and an uncovered offer for a load of barrels, and one unfilled bid in barrels. The barrel price continues to be pushed higher by the bid to purchase a load, with the buyer unable to find a seller. The dry whey price slipped $0.75 cent to close at 64.00 cents with no loads traded. Class III futures are 1 cent lower to 39 cents higher. The butter price increased 1.50 cents, closing at $1.7250 with seven loads traded. Grade A nonfat dry milk increased 0.50 cent to close at $1.1625 with two loads traded. Class IV futures have traded 5.00 cents higher in the December contract. Butter futures are 1.22 cents lower to 2.60 cents higher. Dry whey futures are 0.75 cent lower to 1.00 cents higher. Cheese futures are steady to 4.20 cents higher. The September Federal Order prices will be announced this afternoon.

Wednesday Morning Dairy Market Update - Cheese Strength May Have Run Its Course

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	4 to 5 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	4 to 5 Lower

MILK:

Class III futures increased in the nearby contract on Tuesday but failed to generate strong buying interest in later contracts. This indicates they believe the market may not see much further upside price potential in the future. Futures contracts throughout next year show virtually no premium. Futures usually show seasonal premiums through the year in anticipation of stronger prices. Class IV futures show significantly more premium through 2026. The October contract is the front month as September finished trading on Tuesday. The September Federal Order class prices will be announced today.

CHEESE:

Spot cheese prices have made nice gains over the past few days, but that may have run its course if it follows the pattern seen much of the year. Demand may be improving as we move into the final quarter of the year. The supply of barrel cheese has been tighter as limited trading has been taking place. However, increasing cheese production may keep up with demand.

BUTTER:

There may be further weakness in butter today, as buyers have been able to purchase large amounts of butter over the past few weeks. The decline in price on Tuesday may indicate that much of the buying has been accomplished, and the price may fall back as buyers step back.