Milk Prices
November futures settled at $20.25 per hundredweight, up 13 cents, while Q1 prices came in at $19.68 per hundredweight, 10 cents higher.
Nearby Class III contracts fell along with spot cheese, with November futures dropping to $20.12 per hundredweight, down 15 cents, and December declining to $19.46, 21 cents lower.
Like spot cheese prices, Class III futures were mixed.
Class III futures were mixed, with the November contract up nine cents to $20.22 per hundredweight and December down 16 cents to $19.94.
Warm, dry weather allowed farmers to advance corn harvest, with 81% of the crop now out of the field, a jump from 65% harvested last week.
Class III futures moved lower along with CME cheese.
Class III futures followed barrels downward, with the nearby contract setting at $22.72 per hundredweight.
After plunging yesterday, Class III futures reversed course.
Spot prices dipped today following yesterday’s bearish Milk Production report.
A weaker milk supply has finally resulted in price strength for certain dairy products.
In its September Milk Production report, USDA pegged U.S. milk output at 18.2 billion pounds, up 0.1% year-over-year and ahead of expectations.
Weekly volume trade amassed to 161 loads - the highest ever since CME started the five-day trading week.
In September, consumer spending outpaced expectations, totaling $714.4 billion.
Class III followed cheese prices higher, with the nearby contract settling at $22.55 per hundredweight.
Though spot butter prices held steady, the market was busy with trades, with 46 lots changing hands.
There had been earlier concerns that milk supply would tighten with supply limited to bottling and manufacturing. Lower cow numbers and tight heifer supplies would further reduce milk availability. Much of that concern has dissipated.
CME cheese prices began the week in the red with barrels slipping to $1.8450 per pound
The USDA lowered its milk production forecast for 2024 based on a slight decrease in growth for milk production per cow.
USDA’s World Agricultural Supply and Demand Estimates report leaned bearish for both corn and soybeans, with yield, production and ending stock estimates ahead of pre-report expectations.
Inflation in September was higher than expected, up 0.3% from August and +2.4% versus September 2023, compared to calls for +0.2% month-over-month and +2.3% year-over-year.
Demand for MPCs takes milk from dryers, lowering milk powder output.
Calm in the spot markets translated to a lack of fireworks in futures.
August was yet another strong month for cheese exports with 94 million pounds shipped out, explaining part of why spot cheese prices went on a run higher in September.
Class III contracts for the rest of 2024 fell, with November settling at $21.00 per hundredweight, down 39 cents, and December closing at $20.44 per hundredweight, 42 cents lower.
After making small movements over the last two days, the CME barrel market resumed its downward trajectory and closed at $2.1200 per pound, $0.0325 lower.
Spot butter prices tumbled, giving up seven cents to reach $2.6800 per pound, the lowest level since January.
Class III futures through the rest of 2024 continued to decline, with the November contract down 27 cents to $22.61 per hundredweight.
Barrels continued to decline, landing at $2.1475 per pound and giving up 15 cents, the largest single-day drop since November 2020.
Butter and cheese prices have fallen substantially since the highs were established. The supply outlook has changed with reports indicating there should be sufficient supply through the end of the year.
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CME barrels continued to plunge, falling to $2.2975 per pound, shedding $0.1025 on the day and -$0.2925 from the Friday before.