Tuesday Closing Dairy Market Update - Traders Have Little to Get Excited About

GENERAL OVERVIEW:

Milk futures were under pressure today, with Class III futures showing slightly greater weakness than Class IV futures. The underlying cash is not providing much excitement for traders.

MILK:

Milk futures eroded further as the underlying cash prices provided little support. The October Class IV contract is more than $3.00 above the October Class III contract. The continued strength of nonfat dry milk is providing substantial support to the market. The fact that there has been little strength in cheese and butter prices does not bode well for the market. Any impact of milk production from hot weather is soon to be past, with milk output expected to follow a seasonal path as cow comfort improves. Sufficient milk is expected to be available for all areas of bottling and manufacturing. The current production trend may leave buyers less aggressive, as they do not need to buy aggressively to build inventory. Inventory may build naturally as the production of dairy products remains strong.

AVERAGE CLASS III PRICES:

3 Month:	$16.33
6 Month:	$16.62
9 Month:	$16.89
12 Month:	$17.09

CHEESE:

The barrel cheese price remains steady with little to no activity. Blocks continue to show weakness with limited buying interest. Buyers generally are more aggressive at this time of year, but they see little need to be, as supply remains available. Any seasonal purchases that will take price will be limited. The current demand is not exceeding supply.

BUTTER:

The butter price may retest the low from the end of July at $1.38. A substantial amount of butter offered for sale remains at the close of each spot trading day. As long as this continues, buyers will remain unaggressive.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.25 cents per bushel at $5.3350, November soybeans closed up 6.50 cents at $13.1625, and December soybean meal closed down $5.30 per ton at $349.80. December Chicago wheat closed up 13.00 cents at $7.4700. October live cattle closed up $4.08 at $217.03. October crude oil is up $2.60 per barrel at $94.08. The Dow Jones Industrial Average is down 628 points to 52,786, with the NASDAQ down 86 points to 26,421.

Tuesday Midday Dairy Market Summary - Milk Futures Post Further Losses

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$3.90 Lower
LIVE CATTLE:	$3.37 Higher
DOW JONES:	524 Points Lower
NASDAQ:	20 Points Lower
CRUDE OIL:	$0.62 Higher

MIDDAY MARKET UPDATE:

The block cheese prices slipped 0.25 cent to close at $1.4625 with no loads traded. The barrel cheese price remained steady at $1.5325 with no loads traded. The dry whey price remained steady at 75.25 cents with no loads traded. Class III futures are 2-23 cents lower, with November showing the greatest loss. The butter price declined 3.75 cents to close at $1.4025 with 13 loads traded. There were eight unfilled bids and 65 uncovered offers remaining at the close. It will be difficult to see much upside price potential in butter due to the volume of butter available to the market. Grade A nonfat dry milk increased 1.25 cents to close at $1.8925 with three loads traded. Traders are focusing more on the weakness of butter rather than the strength of nonfat dry milk. Class IV futures are 3-12 cents lower. Butter futures are 0.50 -- 3.00 cents lower. Dry whey futures are 0.50 -- 0.75 cent lower. Cheese futures are 0.10 -- 1.80 cents lower. Nonfat dry milk futures are 0.25 -- 1.05 cents higher.

Tuesday Morning Dairy Market Update - The Week Begins With Milk Futures Under Pressure

OPENING CALLS:

Class III Milk Futures:	5 to 8 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	Mixed
Soybean Meal Futures:	$2 to $4 Lower
Wheat Futures:	11 to 13 Higher

MILK:

Class III futures continue to erode as further premium is taken out of the market. The block cheese price has been unable to find support. Buyers see no need to be aggressive as milk production remains strong, providing sufficient milk for bottling and manufacturing. The seasonal strength in cash prices is nowhere to be found. Buyes have no concern over supplies and are purchasing supplies as needed and have been able to increase ownership without needing to be aggressive. Class IV futures are faring better as the nonfat dry milk price continues to provide support. It does not appear there will be much change in the near-term.

CHEESE:

There is little expectation for cheese prices to move much. Solid support remains elusive as sellers continue to offer supply on the spot market. More milk is moving to bottling due to schools being open, but milk remains available to the vat. Steady cheese production is providing sufficient supplies to the market.

BUTTER:

The spot butter price bounced last week, but the overall price remains in a downtrend. The inability of the market to see a seasonal increase in price at this time of year does not bode well. Sellers continue to have sufficient supply, keeping buyers satisfied without having to chase the price higher.