Wednesday Morning Dairy Market Update - Dry Whey Sets New Record at 88.5 Cents

OPENING CALLS:

Class III Milk Futures:	5 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	0.25 to 0.5 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	4 to 8 Higher
Soybean Meal Futures:	$1 to $2.20 Higher
Wheat Futures:	1 to 4 Lower

MILK:

Class III had a big day Tuesday, trading as much as 49 cents higher on the November contract. Dry whey and cheese momentum helped spur the futures rally. Nonfat dry milk pulled back slightly on the cash market after coming within a few cents of its record high. The concern for high nonfat dry milk (NFDM) is that there are cheaper competitors in the export market. History may repeat itself after seeing the record high set in May and the sharp decline shortly after when the United States was no longer the cheapest market.

CHEESE:

Tuesday was a big day for cheese. Blocks saw an increase of 5.25 cents for spot loads. Futures happily followed along on the deferred contracts. Holiday buying is here as retailers are stocking up before baking season begins.

BUTTER:

With ample cream supplies available, there is a mixture of attitudes from processors on whether or not they should be buying spot loads right now. Some see these lower prices as a good opportunity to stock up while others see the available cream and see no rush to step into the spot market.

Tuesday Closing Dairy Market Update - Dry Whey Sets New Record Spot Price

GENERAL OVERVIEW:

Dry whey jumped 2.5 cents in the cash market Tuesday morning, making an all-time record high of 88.5 cents. Class III jumped 47 cents on the November contract.

MILK:

Class III futures are having a big day with the deferred months rallying from strength in the dry whey and cheese markets. The October contract is only up 7 cents on the day and the November is up 47 cents this afternoon. Dry whey futures did not show nearly as much excitement from spot trade setting a new record-high price. They are trading steady to 0.20 cents higher. Class IV futures had limited trading Tuesday. November Class IV futures fell 42 cents on weakness in nonfat dry milk (NFDM). NFDM futures were 1.45 to 8 cents lower on the day. Cash fell 1 cent to close at $2.26.

AVERAGE CLASS III PRICES:

3 Month:	$16.18
6 Month:	$16.78
9 Month:	$17.04
12 Month:	$17.24

CHEESE:

Cheese futures are 0.7 to 4.2 cents higher this afternoon. Cheddar blocks had a big day, rallying 5.25 cents while barrels were unchanged yet again. Cheese makers currently note strong interest in mozzarella and provolone. There have been multiple reports lately on the problems that high freight cost is causing with the increase in diesel prices. Buyers still seem OK with standing in and buying at these levels.

BUTTER:

Butter futures had a great day, trading anywhere from 4 to 5.25 cents higher on the day. The October contract did not trade. Butter demand domestically has been the strongest in the East and light in the West. Manufacturers have not been consistent with partaking in spot market loads. Some believe this is a great opportunity to take advantage of low prices ahead of holiday demand while others see the availability of cream and are avoiding the spot market. Eight-two percent butterfat butter is a bit tighter than 80%, yet product is available for both products.

OUTSIDE MARKETS SUMMARY:

December corn closed down .25 cent per bushel at $4.8275, November soybeans closed down 4.00 cents at $12.8375 and December soybean meal closed down $5.50 per ton at $363.20. December Chicago wheat closed down 3.00 cents at $6.6925.

December live cattle closed down $0.23 at $226.38. November crude oil is up 1.15 per barrel at $94.89. The Dow Jones Industrial Average is down 180 points at 51,670 and NASDAQ is down 41 points at 27,204.

Tuesday Midday Dairy Market Summary - New All-Time High Set for Dry Whey

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$1.60 Lower
LIVE CATTLE:	$0.20 Lower
DOW JONES:	121 Points Lower
NASDAQ:	20 Points Lower
CRUDE OIL:	$0.33 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 5.25 cents to close at $1.4425 with three loads traded. The barrel cheese price remained unchanged at $1.4525 with no loads traded. The dry whey price set a new record high, climbing 2.5 cents, closing at 88.50 cents with no loads traded. Class III futures are mixed from 8 to 49 cents higher. The butter price was unchanged, closing at $1.270 with no loads traded. Grade A nonfat dry milk fell 1 cent to close at $2.26 with eight loads traded. Class IV futures are 20 cents higher on the November contract, the only contract that has been traded so far Tuesday. Butter futures are 0.45 to 2.25 cents higher. Dry whey futures are unchanged to 0.10 cents higher. Cheese futures are 0.7 to 4.7 cents higher. Nonfat dry milk futures are 0.95 to 4.825 cents lower.