Market News

Milk futures higher, cash dairy mixed

Class III milk futures at the Chicago Mercantile Exchange turned higher Tuesday partly because of optimism for 2018 Farm Bill dairy policy.

December up seven cents at $13.72.  January 24 cents higher at $14.05.  February up 20 cents at $14.42.  March up 22 cents at $14.96.

Barrels were up $0.0450 at $1.2525.  Fourteen trades were made ranging from $1.2150 and $1.2225.

Blocks were unchanged at $1.33.  One trade was made at that price.

Dry whey was down $0.0050 at $0.4325.  Two trades were made at $0.4375 and $0.4325.

Butter was down $0.0025 at $2.1975.

Nonfat dry milk was up $0.0275 at $0.9250.  Four trades were made ranging from $0.90 to $0.9250.

USDA has again lowered its milk production forecast for this year and next because of lower cow numbers and slower growth in milk per cow.  The agency says relatively weak returns should make for a smaller herd size next year.

In its December supply and demand report, USDA forecast cheese prices lower for 2018 because of market weakness and large stocks.  Butter, nonfat dry milk and whey prices were unchanged.  Cheese and butter prices for next year were also lowered again from the previous month while nonfat dry milk was unchanged and whey prices were raised because of low stocks.  Class III prices were again lowered for this year and next on lower cheese prices.

The 2018 all milk price is forecast on a range of $16.15 to $16.25, down about five cents from the previous report.

Exports on a fat basis were raised for 2018 and 2019.  Skim-solids basis exports were raised for 2018 but unchanged for next year.