Futures markets show

strength in dairy markets

The recent up and down price pattern for manufactured dairy products continued through Wednesday of this week in the spot market on the Chicago Mercantile Exchange, but price strength was evident in the Class III milk futures for nearby months and in the dry whey futures through the end of 2012.

After downturns - 4.25 cents per pound for Cheddar blocks and .25-cent for Cheddar barrels on Tuesday of this week - both commodities gained 3 cents per pound in the spot market on Wednesday. That put the day's closing prices at $1.72 for blocks (the same as a week earlier) and $1.74 for barrels (up by 2 cents from a week earlier).

Wednesday's market activity was the sale of 1 carload of blocks and unfilled bids to buy 1 carload each of blocks and barrels. In other recent spot market sessions, carload sales were running at 3 to 5 per day.

Class III milk futures reacted positively on Wednesday to the price gains for Cheddar cheese. They picked up 26 cents per hundred for November and 14 cents for December.

Modest price gains in the previous week boosted the closing prices on Wednesday to $18 per hundred for October, $17.86 for November, and $17.22 for December. Closing prices on Wednesday for months in 2012 ranged from a low of $16.21 for February to a high of $17.05 for September, while all prices for the first nine months of 2013 stood in the lower half of the $16s per hundred.

After a lengthy fairly quiet period, activity resumed in the AA butter spot market on Wednesday of this week with the sale of 5 carloads, 1 unfilled bid to buy, and 1 uncovered offer to sell. The price held at $1.87 per pound - up 1 cent from a week earlier.

There was also some movement in the non-fat dry milk spot market after an even longer quiet period. On an uncovered offer to sell 2 carloads, the price for Grade A fell by 6 cents to $1.43 per pound. The Grade Extra price remained at $1.58.

Price gains were posted for all months from November 2011 through December 2012 in the dry whey futures market on Wednesday of this week. The market closed with prices above 61 cents per pound for October and November, above 50 cents for January through April of 2012, and in the very high 40s for all remaining months of 2012. Dairy economists indicate that every 1 cent per pound on the dry whey price translates to about 6 cents per hundred on milk prices.

A national Class I fluid milk base price of $18.45 per hundred at 3.5-percent butterfat has been announced for November. This is down by $1.11 per hundred from the October price.

Cooperatives Working Together has received a group of 13 bids from Dairy Farmers of America and United Dairymen of Arizona for export assistance on shipping 3.94 million pounds of Cheddar and Monterey Jack cheeses to countries in Asia, North Africa and the Middle East from October through March 2012.

In Wisconsin, the state field office of the National Agricultural Statistics Service has reported that as of Oct. 1 the number of dairy herds licensed to ship milk to the commercial market was 11,916. This is down by 41 from Sept. 1 and by 651 from Oct. 1, 2010.