Friday Morning Dairy Market Update - Cheese Prices Swing as Holiday Buyers Remain Price Sensitive

OPENING CALLS:

Class III Milk Futures:	5 to 15 Lower
Class IV Milk Futures:	0 to 10 Lower
Butter Futures:	0 to 0.50 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 6 Higher
Soybean Futures:	15 to 20 Higher
Soybean Meal Futures:	$3.50 to $4.50 Higher
Wheat Futures:	10 to 12 Higher

MILK:

Class III futures are 12 cents lower on the November contract, the only contract to have traded so far Friday morning. Milk cow numbers continue to grow month after month. Recently, it was reported that one in four feedyard cattle are beef-on-dairy. The strong beef cattle prices have helped keep many farms above water with the extra income received from beef crosses for calves. It has caused a slight drop in cow efficiency as milk production per cow has been trailing lower. This could easily be explained by the fact that a cow producing a calf with low milk production is still better than culling a capable mother. With that, the overall number of cows has brought the sheer volume of milk produced up to a concerning level. The market has shown strength through the innovation of new products and new milk protein demand.

CHEESE:

Overnight Thursday into Friday cheese futures are 0.8 cents lower on the November contract. The drama in the spot market for cheese has been controlling the narrative for cheese and class III futures lately. Thursday happened to be a day sharply lower, while the beginning of the week was noticeably higher. Price sensitivity puts somewhat of a ceiling on what spot buyers are willing to pay to add to holiday inventories.

BUTTER:

Butter has not yet been traded Friday morning. Butter has been lacking some of the holiday demand we have seen in the cheese market. Supplies have been plentiful, so there is no immediate rush to add to inventories. The next cold storage report in less than two weeks will tell more as we head into the baking season. 

Thursday Closing Dairy Market Update - Class III Lower on Cheese Weakness

GENERAL OVERVIEW:

Cheese blocks and barrels both traded lower in the spot market earlier today bringing weakness to Class III milk futures. Dairy market futures saw lower trade across the board in nearly every contract.

MILK:

Class III futures saw lower trade Thursday afternoon as futures traded 6 to 27 cents lower in the late day trade. The average price of Nonfat Dry Milk for the week ending Nov. 7, reported by the USDA was $2.0705 per pound. That is a decline of 4.6 cents from the previous week. Class IV futures have been extremely quiet this week with settlements nearly unchanged all week.

AVERAGE CLASS III PRICES:

3 Month:	$17.20
6 Month:	$17.08
9 Month:	$17.20
12 Month:	$17.36

CHEESE:

Cheese futures traded 1.2 to 2.4 cents lower Thursday afternoon. Cheddar cheese blocks fell 6 cents in the spot market today, while barrels traded 2 cents lower. There has been volatility in the spot market lately, driven by the time of year. Holiday buying has been supportive, but buyers are price sensitive. The AMS National Dairy Sales Report saw an increase of 11.2 cents from the previous week for 40-pound block cheddar cheese prices, coming in at $1.6397 per pound.

BUTTER:

Butter futures traded anywhere from 0.675 cents lower Thursday afternoon to as much as 1.475 cents higher in the deferred contracts. The spot market declined 2.5 cents for butter loads today. The AMS National Dairy Product Sales report saw a decrease in the average butter price of 1.4 cents from last week at $1.3560 per pound.

OUTSIDE MARKETS SUMMARY:

December corn closed down 5.50 cents per bushel at $4.4250, January soybeans closed down 11.75 cents at $12.1900 and December soybean meal closed down $4.30 per ton at $325.40. December Chicago wheat closed down 15.25 cents at $5.8425.

December live cattle closed down $0.08 at $218.90. December crude oil is up 2.17 per barrel at $88.70. The Dow Jones Industrial Average is down 189 points at 52,297 and NASDAQ is down 100 points at 25,366.

Thursday Midday Dairy Market Summary - Class III Milk Futures Lower

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	10 Lower
SOYBEAN MEAL:	$3.60 Lower
LIVE CATTLE:	$0.15 Lower
DOW JONES:	187 Points Higher
NASDAQ:	33 Points Higher
CRUDE OIL:	$1.13 Higher

MIDDAY MARKET UPDATE:

The block cheese price decreased by 6 cents to close at $1.62 with 11 loads traded. The barrel cheese price declined 2 cents to close at $1.6650 with no loads traded. Dry whey increased 2 cents to close at 89 cents with 1 load traded. Class III futures are trading 12 to 19 cents lower. The butter price decreased by 2.5 cents, closing at $1.2325 with 3 loads traded. Grade A nonfat dry milk decreased 2.25 cents to close at $2.05 with 9 loads traded. Class IV futures have not yet been traded today. Butter futures are 0.5 to 1.9 cents lower. Dry whey futures are mixed, trading 0.075 cents lower and 0.8 cents higher. Cheese futures are 0.1 to 3.1 cents lower. Nonfat dry milk futures are 0.275 cents lower to 1.775 cents higher.