Thursday Morning Dairy Market Update - Light Trading Activity Expected

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	2 to 3 Higher

MILK:

It has not been a good week for milk futures. Class III futures moved to new contract lows Wednesday. Class IV futures have eliminated most of their recent gains. Spot prices have not provided support to futures. It seemed as if seasonal buying may have surfaced for butter, but that does not appear to be the case. Demand is good, and buyers are active, but sellers continue to offer supplies to the spot market. Milk supplies are sufficient for demand, with spot milk available to manufactures at reasonable prices. There is little concern over tightening milk supplies through the summer. The USDA will release the May Dairy Products report Thursday afternoon showing the amount of dairy products produced during the month.

CHEESE:

Cheese prices remain in a range with little fundamental reason to break out of the range. Demand is steady and production is steady. The Dairy Product report is expected to see higher production than a year ago. According to the May Cold Storage report, if cheese production is higher, then demand has absorbed the increased production as inventory remains in line with a year ago.

BUTTER:

The butter prices have declined over the past two days, but the decline has been minimal despite a large volume of loads trading on the spot market. Buyers are willing to purchase what is coming to the market without being aggressive.

Wednesday Closing Dairy Market Update - June Class III Price is $15.98

GENERAL OVERVIEW:

It was another negative day for milk futures. The decline in Class III futures did not seem to be warranted, but maybe it will make more sense on Thursday. The June Federal Order class prices showed an increase in Class II and a decrease in Classes III and IV.

MILK:

Class III futures made new lows today as traders see limited upside potential and remove some of the premium deferred contracts hold. Class IV futures have nearly eliminated the gains realized recently as the nonfat dry milk price falls back to another new low. Hot weather is having an impact on milk production. However, many dairy farmers indicate that their cows have held output levels and feed intakes despite the rising temperatures. The June Federal Order class prices were announced today. The Class II price is $22.78, up $2.50 from the previous month and up $4.35 from June 2025. The Class III price is $15.98, down $0.94 from May and down $2.84 from a year ago. The Class IV price is $20.96, down $1.36 from May, but up $2.66 from June 2025. There is a large difference between the June Class IV announced price and the current July futures price at $18.00. That discount will not be reduced unless butter and nonfat dry milk prices increase.

AVERAGE CLASS III PRICES:

3 Month:	$16.13
6 Month:	$16.79
9 Month:	$16.98
12 Month:	$17.07

CHEESE:

Steady spot cheese prices do not mean the market has found support. It may keep prices in a sideways trading range. Even though increased temperatures have impacted milk production, spot milk prices remain similar to what they were, ranging from $3.00 under to $0.50 over class. Cheese demand is reported as steady. Demand has been keeping up with production as inventories remain aligned with a year ago. There is some concern that inventories may not decline seasonally and remain higher through the second half of the year.

BUTTER:

Butter inventories are reportedly increasing despite strong demand. Churning has been active with plants running seven days per week. However, inventories in May were 9% below a year earlier. That has not caused concern over the potential for tighter supplies later in the year when demand increases seasonally. Buyers have been able to purchase ample supplies for immediate demand and to increase ownership for later demand.

OUTSIDE MARKETS SUMMARY:

December corn closed up 6.25 cents per bushel at $4.4225, November soybeans closed up 5.50 cents at $11.4925 and December soybean meal closed up $1.60 per ton at $304.70. September Chicago wheat closed up 10.75 cents at $6.0000. August live cattle closed down $0.60 at $241.83. August crude oil is down $1.38 per barrel at $68.12. The Dow Jones Industrial Average is down 14 points at 52,305, with the NASDAQ down 174 points at 26,040.

Wednesday Midday Dairy Market Summary - Nonfat Dry Milk Falls

OUTSIDE MARKETS SUMMARY:

CORN:	6 Higher
SOYBEANS:	7 Higher
SOYBEAN MEAL:	$1.70 Higher
LIVE CATTLE:	Unchanged
DOW JONES:	139 Points Higher
NASDAQ:	62 Points Lower
CRUDE OIL:	$1.24 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged during spot trading, with no loads traded in barrels, but 21 loads traded in blocks. The dry whey price remained unchanged at 68.50 cents with no loads traded. Class III futures are 3 -- 26 cents lower in moderate trading activity. The butter price declined 1.75 cents to close at $1.6800 with 22 loads traded. The Grade A nonfat dry milk price fell 9.50 cents to close at $1.5350 with 19 loads traded. This is the lowest price since February 4th. Further weakness is expected in the near term. Class IV futures are 5 -- 25 cents lower. Futures have not been under pressure in relation to the decline in spot prices, as the weakness on Tuesday had much of this already factored in. Butter futures are 1.92 cents lower to 1.97 cents higher. Dry whey futures are 1.00 -- 1.10 cents lower. Nonfat dry milk futures are 2.52 -- 5.02 cents lower. Cheese futures are 2.60 cents lower to 0.50 cent higher.