Friday Closing Dairy Market Update - Class IV Futures Post a Strong Close for the Week

GENERAL OVERVIEW:

Milk futures closed higher with numerous contracts limit up. The strength in the butter price was a surprise and fueled the buying interest in Class IV futures.

MILK:

Class III milk futures bounced slightly after making new contract lows earlier in the week. Class IV futures posted strong gains during the second half of the week, fueled by the increase in the butter price. This does not mean that this is a change in trend. Higher spot prices will likely increase selling interest to take advantage of the higher prices. Spot milk supplies are readily available, but demand from plants that have manufacturing capacity has provided support for prices, with some spot milk purchased at a premium to class.

AVERAGE CLASS III PRICES:

3 Month:	$16.08
6 Month:	$16.64
9 Month:	$16.93
12 Month:	$17.00

CHEESE:

For the week, blocks declined 3.00 cents with 48 loads traded. The weekly average price is $1.4210. Barrels increased 2.00 cents with 2 loads traded. The weekly average price is $1.4710. Dry whey increased 0.50 cent with 3 loads traded. The weekly average price is $68.10. This did not provide traders with much to hang their hats on for market direction.

BUTTER:

For the week, butter increased 9.50 cents with 68 loads traded. The weekly average price is $1.5470. Grade A nonfat dry milk decreased 4.25 cents with 36 loads traded. The weekly average price is $1.5935. The butter price increased by 12.50 cents during the second half of the week, providing some hope that the low has been reached and greater buying interest may be surfacing as we move toward the second half of the year.

OUTSIDE MARKETS SUMMARY:

July corn closed down 2.00 cents per bushel at $4.1275, November soybeans closed down 0.75 cent at $11.5625, and July soybean meal closed down $1.20 per ton at $307.00. September Chicago wheat closed down 11.75 cents at $5.8975. August live cattle closed down $1.40 at $245.83. August crude oil is down $1.89 per barrel at $70.03. The Dow Jones Industrial Average is down 45 points at 51,876, with the NASDAQ down 61 points at 25,298.

Friday Midday Dairy Market Update - Butter Price Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	2 Lower
SOYBEAN MEAL:	$2.20 Lower
LIVE CATTLE:	$0.02 Lower
DOW JONES:	189 Points Lower
NASDAQ:	221 Points Lower
CRUDE OIL:	$2.53 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 2.00 cents to close at $1.4200 with 9 loads traded. The barrel cheese price gained 0.25 cent to close at $1.4800 with 2 loads traded. The dry whey price gained 1.50 cents to close at 68.50 cents with 2 loads traded. Class III futures are 1 cent lower to 12 cents higher. The nearby June contract shows the only loss. The butter price jumped 9.50 cents to close at $1.6500 with 9 loads traded. There were 9 unfilled bids and no uncovered offers remaining at the close. Grade A nonfat dry milk gained 1.75 cents to close at $1.5975 with no loads traded. Class IV futures are 4-54 cents higher. Butter futures are 3.05 cents lower to 7.50 cents higher. The lower prices are in the March and April contracts. Dry whey futures are 0.25 cent lower to 0.75 cent higher. Cheese futures are 0.30 cent lower to 0.90 cent higher. Nonfat dry milk futures are steady to 4.00 cents higher.

Friday Morning Dairy Market Update - Milk Futures Remain Unable to Find Support

OPENING CALLS:

Class III Milk Futures:	2 to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 7 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	8 to 10 Lower

MILK:

The major reports for the dairy industry are now history for another month. The milk production report showed strong milk output and increasing cow numbers, continuing the bearish trend. The cold storage report was neutral, indicating good demand as inventory has not increased much despite strong production. The livestock slaughter report showed dairy cattle slaughter maintaining a slower pace. Traders have little else to focus on outside of daily spot trading. There is little reason for traders to get excited over the market for higher prices.

CHEESE:

Cheese inventory increased in May, but at a much slower pace than usual for that time of year. This keeps cheese inventory somewhat in line with a year ago despite higher cheese output. This indicates good demand. However, strong domestic and international demand has not been good enough to tighten supply.

BUTTER:

Butter has had a nice bounce over the past two days, and there is a good chance a further gain will be seen Friday, as there were quite a few unfilled bids at the close of spot trading on Thursday. However, the strength may not continue for very long. Higher prices may bring sellers back into the market more aggressively.