Tuesday Midday Dairy Market Summary - Nonfat Dry Milk Continues Higher

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$3.80 Higher
LIVE CATTLE:	$2.35 Lower
DOW JONES:	208 Points Lower
NASDAQ:	67 Points Higher
CRUDE OIL:	$1.53 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remain unchanged at $1.3650 and $1.4525, respectively. There were two loads of blocks traded and none of barrels. The dry whey price increased 0.75 cent to close at 78.75 with no loads traded. Class III futures are mixed, from 5 cents lower to 5 cents higher. The butter price decreased 2.00 cents to close at $1.3400 with 14 loads traded. There were six unfilled bids and 18 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 3.25 cents to close at $2.1250 with six loads traded. This is the highest price since June 3 and has nearly regained the entire losses since early May. Class IV futures are 5 to 19 cents higher. Butter futures are 4.05 cents to 2.25 cents higher. Dry whey futures are 0.20 to 0.45 cent higher. Cheese futures are steady to 0.60 cent lower. Nonfat dry milk futures are 0.72 to 1.52 cents higher. The August Milk Production report will be released this afternoon. I estimate milk production to be 1.6% above a year ago and cow numbers down 4,000 head from July.

Tuesday Morning Dairy Market Update - Milk Production Report Today

OPENING CALLS:

Class III Milk Futures:	5 to 8 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	7 to 8 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	8 to 10 Lower

MILK:

Class III futures continued to struggle on Monday despite the increase in the block cheese price. Traders have little reason to believe current fundamentals and the market trend will change anytime soon. Lower milk prices may increase the desire or need to produce more milk to maintain cash flow. However, higher milk output will keep milk supplies sufficient for demand and dairy products readily available. The concern is that demand is not keeping up. The USDA will release the August Milk Production report this afternoon. I estimate milk production to be 1.6 percent above a year ago and cow numbers down by 4,000 head from July. No Dairy Revenue Protection prices will be released this afternoon.

CHEESE:

Spot cheese prices are going nowhere. The trend is down, and price bounces are short-lived. Cheese production is steady and sufficient for demand. Manufacturing plants continue to offer cheese on the spot market to keep inventory from building at the plant level.

BUTTER:

Butter demand is not as strong as it generally is at this time of year. Buyers see no need to be aggressive as they continue to purchase supplies at lower prices. International demand remains strong, but it is not enough to tighten the supply. Numerous butter plants have moved to operating six days a week as the cream supply increases.

Monday Closing Dairy Market Update - Traders Search for Positive Fundamentals

GENERAL OVERVIEW:

Class III futures found little support, with most contracts closing lower. Later contracts showed continued pressure. Class IV futures found support from a stronger nonfat dry milk price. The August Milk Production report will be released tomorrow.

MILK:

Cheese prices are choppy and continue in a downtrend. This is not typical during this time of year and is a great cause for concern. Quite a bit of purchasing by recutters and packagers for the holidays has been completed, with some ongoing purchases continuing into October. Cheese buying will continue up to the holidays as demand will be ongoing, but sufficient supplies may limit the upside price potential. USDA will release the August Milk Production report on Tuesday. Milk production is expected to be higher than a year ago. I estimate milk production to be 1.6% higher than August 2025. I estimate the cow number to be 4,000 head less than July. Lower milk and calf prices may begin to increase culling. The August Livestock Slaughter report will be released on Thursday and will indicate the attitude will hold moving through the end of the year.

AVERAGE CLASS III PRICES:

3 Month:	$15.95
6 Month:	$16.15
9 Month:	$16.46
12 Month:	$16.69

CHEESE:

The slight increase in the block cheese price does little to change the trend or the attitude in the market. The market will need to prove itself before the outlook improves. It is unlikely current demand will be sufficient to tighten the supply of cheese sufficiently in the near term.

BUTTER:

The price continues to struggle, with any strength being short-lived. The nonfat dry milk price has been steady or higher the past ten consecutive days. It is doubtful the price will move back to the high in May, but it continues to move closer to that level. The price may reach a threshold where demand will slow as it did at that time. However, demand is strong, and higher prices may remain for an extended time.

OUTSIDE MARKETS SUMMARY:

December corn closed up 15.50 cents per bushel at $5.4300, November soybeans closed up 24.50 cents at $13.2800, and December soybean meal closed up $9.80 per ton at $368.40. December Chicago wheat closed up 12.50 cents at $7.2675. December live cattle closed up $5.38 at $222.00. November crude oil is down 4.08 per barrel at $92.00. The Dow Jones Industrial Average is up 366 points at 52,049, with the NASDAQ up 600 points at 27,122.