Wednesday Midday Dairy Market Summary - Futures Decline Despite Higher Cash

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	6 Lower
SOYBEAN MEAL:	$1.30 Higher
LIVE CATTLE:	$0.85 Higher
DOW JONES:	118 Points Higher
NASDAQ:	122 Points Lower
CRUDE OIL:	$2.73 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 2.50 cents to close at $1.4400 with 26 loads traded. There were 3 unfilled bids and 1 uncovered offer remaining. The barrel cheese price increased 1.75 cents to close at $1.4775 with no loads traded. The dry whey price remained unchanged at 68.50 with no loads traded. Class III futures are 19 cents lower to 2 cents higher, with most contracts posting losses. One would think that futures would be higher with the strength, but traders think it will be short-lived. The butter price increased 5.00 cents to close at $1.5250 with 1 load traded. There were 19 unfilled bids and 5 uncovered offers remaining at the close. Grade A nonfat dry milk decreased 2.50 cents to close at $1.5750 with 11 loads traded. Class IV futures are 9 cents lower to a penny higher. Butter futures are 2.50 cents lower to 2.00 cents higher. Dry whey futures are steady to 0.25 cent lower. Cheese futures are steady to 1.70 cents lower. Nonfat dry milk futures are 0.40 cent lower to 0.42 cent higher.

Wednesday Morning Dairy Market Update - Unusual Overnight Trading Activity

OPENING CALLS:

Class III Milk Futures:	4 to 7 Lower
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	1 to 2 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	2 to 3 Higher

MILK:

There was unusual trading activity in the overnight markets. The July, August, and September Class III contracts traded, which is not unusual, but traded activity also took place in the January through June 2027 contracts, which is unusual. The same number of contracts traded in each 2027 contract, suggesting one trader was selling the strip, and one was buying. Unfortunately, prices were unchanged to 25 cents lower. Class IV futures had one contract traded in nearby June. This is unusual as the June contract has mostly been priced and generally moves very little until the class prices are announced. Being a cash-settled market, it is surprising that the price would trade 23 cents lower. This certainly does not look positive for the day.

CHEESE:

There is little anticipation of much strength in spot cheese anytime soon. Any price bounce has been short-lived, with the pattern expected to continue. Buyers are not building inventory, and sellers want to keep inventory from building.

BUTTER:

Manufacturers are selling what they are producing at whatever price they can get. Buyers see this and continue lowering bids, with no need to purchase aggressively. Current demand is being met with limited interest in building inventory for later demand. Price support remains elusive. 

Tuesday Closing Dairy Market Update - The REAL Butter Act Has Been Introduced

GENERAL OVERVIEW:

Mixed trading activity dominated milk futures. Trading activity was exceptionally strong in the July and August Class III futures contracts. The REAL Butter Act has been introduced to the U.S. House of Representatives.

MILK:

Traders focused on the July and August Class III contracts today, with over 1,000 traded in July and over 800 in August. It has been some time since trading volume was this large in contracts. The movement of spot prices did not provide much to generate the level of trading interest in Class III contracts. The May Milk Production report had little impact on the market as increased production and higher cow numbers were anticipated. In the top 24 states, there were only 5 states that showed a decrease in milk production. Pennsylvania declined 1.9%; Vermont declined 0.9%; both Virginia and Washington declined 0.8%; and New Mexico declined 0.4%. Kansas showed the largest increase with a gain of 21.2% and was followed by Oregon with a gain of 7.1%. All other states gained less than 5.0%. The REAL Butter Act has been introduced to the U.S. House of Representatives. The Act is designed to force synthetic dairy products to disclose their laboratory origins. Tony Wied, a Republican representing Wisconsin's 8th Congressional District, has initiated the bill. This targeted federal bill aims to establish strict, mandatory labeling requirements for synthetic, laboratory-grown butter products, which are a direct attack on American dairy farmers.

AVERAGE CLASS III PRICES:

3 Month:	$16.13
6 Month:	$16.76
9 Month:	$16.95
12 Month:	$17.01

CHEESE:

The bounce in the cheese price is not expected to last or at least is not expected to see much upside potential. There is little indication of a tight market, which leaves buyers limited in their need to purchase cheese for upcoming demand. Any upcoming demand is expected to be met with sufficient cheese supplies due to strong cheese production.

BUTTER:

The butter price has fallen back further than expected and may continue with further weakness. Sellers want to move supplies at whatever price they can get. Buyers continue to hold back, remaining complacent.

OUTSIDE MARKETS SUMMARY:

July corn closed down 1.75 cents per bushel at $4.0975, November soybeans closed up .25 cent at $11.4175, and July soybean meal closed up $3.10 per ton at $302.90. September Chicago wheat closed down 10.50 cents at $5.9700. August live cattle closed down $1.35 at $246.00. August crude oil is down $0.65 per barrel at $73.21. The Dow Jones Industrial Average is down 46 points at 51,667, with the NASDAQ down 580 points at 25,587.