Market News

Milk futures, cash cheese lower

In Class III trade at the Chicago Mercantile Exchange, milk futures were pressured by the USDA’s new production and price outlook, along with follow through technical selling. September was down $.08 at $16.43, October was $.27 lower at $16.43, November was down $.24 at $16.35, and December was $.15 lower at $16.05.

Over in the spot market, cash cheese was lower. Blocks were down $.06 at $1.65. The last uncovered offer was for one load at that price. Barrels were $.035 lower at $1.57. There a total of 14 trades reported. The last unfilled bid was on one load at $1.56. The last unfilled offer was for one load at $1.59.

Butter was unchanged at $2.0325. There was one load sold at that price, along with one at $2.0125. The last unfilled bid was on one load at $2.00. The last uncovered offer was for one load at $2.04.

Nonfat dry milk was steady at $.905. The last unfilled bid was on one load at $.89. The last uncovered offer was for one load at $.93.

In the supply and demand update, for 2016, the USDA now sees milk production at 212.2 billion pounds, up 100 million from August. Price projections for milk, cheese, and butter were lower, while nonfat dry milk and dry whey price outlooks were higher. The third quarter price for all milk is estimated at $16.75 to $16.95 per hundredweight with the fourth quarter at $17.25 to $17.75. The annual price is expected to be between $16.10 and $16.30. For Class III, the 2016 price is pegged at $14.75 to $14.95 with Class IV at $13.65 to $13.95. Cheese is estimated at $1.60 to $1.62 per pound with butter at $2.08 to $2.12. Nonfat dry milk is seen at $.81 to $.83 with dry whey at $.26 to $.28.

For 2017, milk production is estimated at 216.1 billion pounds, up 300 million on the month. Month to month, dairy prices were mixed. All milk for 2017 is projected at $16.15 to $17.15 per hundredweight with Class III at $14.95 to $15.95 and Class IV at $13.80 to $14.90. Cheese is expected to be between $1.605 and $1.705 and butter is pegged at $1.955 to $2.085. Nonfat dry milk is seen at $.89 to $.96 with dry whey at $.295 to $.325.