Thursday Closing Dairy Market Update - Spot Prices Lack Solid Direction

OVERVIEW:

Class III futures came back from their lows that were seen around the time spot trading took place. Class IV futures posted strong gains in later contracts. Spot milk prices have strengthened over the past week as demand seems to be improving.

MILK:

Class III milk futures moved within a 30-50 cents range, ultimately closing higher in most contracts. Milk production is slowly improving as cooler temperatures improve cow comfort. Class I demand is steady. Spot milk prices range from $1.00 below class to $1.00 above class. There has been some improvement in demand from manufacturing, keeping the milk supply from becoming burdensome. Steady cheese production and steady demand for cheese keep the supply from building. Higher milk production is expected to remain higher throughout the rest of the year. Hopefully, the balance of milk supply to demand will support prices and higher milk checks as time moves forward.

AVERAGE CLASS III PRICES:

3 Month:	$17.39
6 Month:	$17.28
9 Month:	$17.22
12 Month:	$17.28

CHEESE:

Cheese production is steady to stronger as milk receipts at the plant level are improving. Some plants indicate that they have been busy filling contracted orders, leaving spot supplies somewhat tight. However, the consensus is that cheese is readily available to meet demand. Packagers and recutters continue to purchase cheese in preparation for the holidays.

BUTTER:

Cream supplies have been increasing, putting pressure on cream prices. With the plentiful cream supplies, churning has been active with many plants indicating they are not looking to purchase cream from the spot market. Buyers have been looking to increase ownership to build supplies ahead of the holiday season.

OUTSIDE MARKETS SUMMARY:

December corn closed up 5.25 cents per bushel at $4.2175, November soybeans closed up 10.75 cents at $10.2375 and December soybean meal closed up $5.70 per ton at $279.30. December Chicago wheat closed up 5.50 cents at $5.1475. December live cattle closed down $1.03 at $233.48. November crude oil is down 1.30 per barrel at $60.48. The Dow Jones Industrial Average is up 79 points at 46,520, with the NASDAQ up 89 points at 22,844.

Thursday Midday Dairy Market Summary - Barrels Slip With One Load Traded

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$4.30 Higher
LIVE CATTLE:	$0.37 Lower
DOW JONES:	34 Points Higher
NASDAQ:	84 Points Higher
CRUDE OIL:	$1.25 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 2.00 cents, closing at $1.7750 with nine loads traded. The barrel cheese price slipped 0.50 cent, closing at $1.72 with one load traded. The dry whey price remained unchanged at 64.00 cents with no loads traded. Class III futures are mixed from 14 cents lower to 3 cents higher, with trading activity only through April. The butter price increased 2.50 cents, closing at $1.75 with eight loads traded. Grade A nonfat dry milk decreased 1.25 cents to close at $1.15 with 12 loads traded. Class IV futures are 6 to 22 cents higher. Butter futures are 0.22 cent lower to 5.75 cents higher. Dry whey futures are 0.50 to 1.50 cents lower. Cheese futures are 0.70 cent lower to 0.50 cent higher.

Thursday Morning Dairy Market Update - Late Support May Be Developing

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	1 to 2 Lower
Soybean Meal Futures:	$0.50 to $1 Lower
Wheat Futures:	1 to 2 Higher

MILK:

Class III milk futures through the end of the year have increased around $1.00 per cwt over the past week, supported by higher cheese prices. It is uncertain whether this is a change in trend. Historically, the market reaches its peak in October, but this year has been anything but usual. Cow numbers continue to increase, with milk production per cow significantly higher than a year ago. This has kept the milk supply sufficient for demand. Dairy farms have retained more cows to keep the barns full rather than purchasing replacement heifers at a cost of more than $4,000. It is good to see the recent strength in the market, and hopefully, we are seeing delayed seasonal strength.

CHEESE:

Cheese prices have increased for three consecutive days. Buyer interest has improved while sellers have held back. The barrel price has been increasing with no sellers showing up during spot trading. Cheese production has been slowly increasing due to an increase in milk receipts at the plant level.

BUTTER:

The butter price may be developing a sideways trading range for the time being. Buyers have been more aggressive as they take advantage of the low price. Butter production has been increasing due to increasing cream supplies.