At the Chicago Mercantile Exchange Class III milk futures closed lower Thursday pressured in part by lower global market prices and a bearish supply and demand report. October through December lost 9-14 cents per cwt. The 2019 average ranged from 2-12 cents softer. Class IV milk moved in the opposite direction. January through April up 7 cents each and May through December 5 cents higher, respectively. October closed nine cents lower at $15.66. November down 13 cents at $15.76. December down 14 cents at $15.80. January nine cents lower at $15.75. February through next September contracts closed three cents lower to 12 cents lower.
CME spot product markets on Thursday were mainly higher. Blocks and dry whey were the exceptions as blocks fell a penny to $1.65 per lb. Whey was unchanged at 56 and a quarter cent per lb. Barrels added a half cent following 8 trades and 12 bid to settle at $1.37 per lb. Grade A nonfat dry milk moved 1 and a quarter cent higher to 87 cents on 8 bids. Butter was the big mover as it jumped 4 cents to $2.26 and three-quarter cents per lb. after 1 trade and 7 bids.
In their October World Agriculture Supply and Demand Estimates report, USDA boosted both milk production and the 2019 all milk price forecast. The milk production forecasts for 2018 and 2019 were increased from the previous month on a more rapid pace of growth in milk per cow, USDA reported. The dairy herd continues to grow and cow numbers are raised for 2019. USDA expects strength in butterfat and cheese imports. The Class III price is lowered for 2018; but for 2019, higher whey prices are expected to more than offset the declines in cheese prices, and the Class III price forecast is raised, USDA noted. USDA increased Class IV price estimates for both years due to higher forecast butter prices. The 2018 all milk price forecast is unchanged at the midpoint at $16.35 to $16.45 per cwt, and the 2019 price is raised to $16.85 to $17.75 per cwt. However, the 2018 and 2019 skim-solids based imports are lower. USDA bumped 2018 fat basis exports higher for 2019 but made no change to the 2019 forecast. USDA increased 2018 and 2019 butter and whey price forecasts from the previous month on expected demand strength, but they lowered cheese price forecasts on continued large supplies. The NDM price forecast was unchanged.
