Thursday Midday Dairy Market Summary - Butter Price Pushes Higher

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	14 Higher
SOYBEAN MEAL:	$2.80 Higher
LIVE CATTLE:	$1.20 Higher
DOW JONES:	158 Points Higher
NASDAQ:	127 Points Lower
CRUDE OIL:	$1.32 Higher

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged at $1.4400 and $1.4775 respectively. There were no loads traded in either category. There were 4 unfilled bids and 4 uncovered offers remaining for blocks at the close of spot trading. There was no interest in buying or selling in barrels. The dry whey price decreased 1.50 cents to close at 67.00 cents with no loads traded. This is the lowest dry whey price since June 8. Class III futures are 6 cents lower to 7 cents higher. The butter price increased 3.00 cents to close at $1.5550 with 21 loads traded. There were 21 unfilled bids remaining with 5 uncovered offers, suggesting further upside price potential. Grade A nonfat dry milk increased 0.50 cent to close at $1.5800 with 7 loads traded. Class IV futures are 3 cents lower to 38 cents higher. Butter futures are steady to 6.05 cents higher. Dry whey futures are 0.50 cent lower to 0.40 cent higher. Cheese futures are 0.30 cent lower to 1.00 cent higher. Nonfat dry milk futures are 0.75 - 3.30 cents higher. USDA will release the May Cold Storage and the May Livestock Slaughter report this afternoon.

Thursday Morning Dairy Market Update - Cold Storage and Livestock Slaughter Report Today

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures continue to struggle. Strength in spot prices has been short-lived. After a bounce higher in spot prices, they have generally fallen back to lower prices. The strength in spot cheese and butter Wednesday resulted in lower milk futures prices. There is little reason for spot prices to increase as supplies are sufficient for demand, and production remains strong. Cow numbers continue to increase, as improved genetics and management increase the longevity of cows in the herd. USDA will release the May Livestock Slaughter report Thursday, which is expected to show slaughter following along seasonal lines.

CHEESE:

The block cheese price has increased over the past 2 days, but is expected to have limited further upside potential. Buyers will reach a threshold of what they are willing to pay in a market that has sufficient supply. USDA will release the May Cold Storage report Thursday afternoon, and it should show inventory near the levels of a year ago.

BUTTER:

There was limited interest in buying and selling during spot trading, but one buyer was aggressive, bidding the price up 5.00 cents to purchase a load. The higher price may increase seller interest Thursday as butter supplies remain plentiful and manufacturers do not want to build inventory at the plant level.

Wednesday Closing Dairy Market Update - There May Be Little Relief From Low Milk Prices

GENERAL OVERVIEW:

Milk futures closed mostly lower despite the increase in cheese and butter prices. It is uncertain as to why this divergence took place. USDA will release the May Cold Storage and the May Livestock Slaughter reports on Thursday.

MILK:

Spring flush has ended in all areas of the country, but milk production continues to exceed year-earlier levels. This will continue unless there is a significant impact from hot weather throughout the summer. However, advancements have been made with cooling systems that minimize some of the impact of hot weather. Unless there is a Black Swan event, milk prices are expected to remain depressed throughout the rest of the year. USDA will release the May Livestock Slaughter report on Thursday. Slaughter is expected to be in line with the usual level for this time of year, even though cow numbers increased in May according to the milk production report. The May Cold Storage report will also be released, indicating whether demand has kept pace with the production of dairy products.

AVERAGE CLASS III PRICES:

3 Month:	$16.04
6 Month:	$16.63
9 Month:	$16.84
12 Month:	$16.93

CHEESE:

Demand for spot milk from cheese plants is variable. Not because of slower demand, but it is tied to production schedules. Spot milk prices this week range from $4.50 under class to $1.50 over class. Milk receipts from farms have not diminished, but increased manufacturing capacity has resulted in variable interest in spot milk. This may result in cheese production outpacing demand during the time of year when inventory generally decreases.

BUTTER:

The strength of butter was surprising, as only one load was traded. Sellers have been aggressive in the past, and the higher price took place due to the lack of selling interest. Traders did not react to the price increase, with most butter futures contracts lower.
Traders anticipate the bounce in the price will be short-lived.

OUTSIDE MARKETS SUMMARY:

July corn closed down 2.75 cents per bushel at $4.0700, November soybeans closed down 6.75 cents at $11.3500, and July soybean meal closed up $0.70 per ton at $303.60. September Chicago wheat closed down 1.00 cent at $5.9600. August live cattle closed up $0.53 at $246.53. August crude oil is down $3.34 per barrel at $69.87. The Dow Jones Industrial Average is up 102 points at 51,849, with the NASDAQ down 110 points at 25,477.