Wednesday Closing Dairy Market Update - GDT Increased 2.3 Percent

GENERAL OVERVIEW:

Milk futures closed under pressure. The increase in the spot nonfat dry milk price was offset by the weakness in butter. The Global Dairy Trade auction trade-weighted average increased 2.3% from the previous event.

MILK:

Class III milk futures opened trading higher but fell back throughout the day as both block cheese and dry whey spot prices closed lower. Trading volume was moderate with trading activity confined to the 2026 contracts. Class IV futures were lower with trading confined to the September and October contracts. The fact that milk prices are not trending higher as a result of stronger spot prices is a concern. Buyers are seasonally more aggressive at this time of year as they look ahead to Fall and holiday demand. The Global Dairy Trade auction trade-weighted average price increased 2.3% from the previous event. There were 41,054 metric tons sold at the average price of $3,873 per metric ton. Anhydrous milk fat decreased 6.0% to $5993 per metric ton or $2.72 per pound. Butter decreased 2.0% to $5,090 per metric ton, or $2.31 per pound. Buttermilk powder decreased 3.5% to $4,552 per metric ton or $2.06 per pound. Cheddar cheese increased 0.6% to $3,744 per metric ton or $1.70 per pound. Lactose increased 3.2% to $1,807 per metric ton or $0.82 per pound. Mozzarella increased 6.1% to $4,234 per metric ton or $1.97 per pound. Skim milk powder increased 7.6% to $3,502 per metric ton or $1.59 per pound. Whole milk powder increased 3.0% to $3,591 per metric ton or $1.63 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$17.00
6 Month:	$17.20
9 Month:	$17.30
12 Month:	$17.40

CHEESE:

Cheese production maintains a steady pace. More milk is moving to bottling for school accounts, but sufficient milk remains available for demand. Cooler weather in the Central region is improving cow comfort, resulting in increased milk output. Spot milk prices this week are running $1.00 below class to $3.00 above. Milk is available for manufacturing for those who need it.

BUTTER:

Butter is having difficulty finding support as manufacturers continue to offer supplies on the spot market. Even though export demand has been strong and domestic demand has been steady with signs of improvement, it has not been enough to tighten the supply and support prices.

OUTSIDE MARKETS SUMMARY:

December corn closed up 10.00 cents per bushel at $4.9800, November soybeans closed up 20.50 cents at $12.3725, and December soybean meal closed up $6.80 per ton at $325.60. December Chicago wheat closed up 16.25 cents at $6.9750. October live cattle closed down $1.70 at $217.23. September crude oil is up $0.89 per barrel at $85.83. The Dow Jones Industrial Average is up 120 points at 53,463, with the NASDAQ up 41 points at 26,331.

Wednesday Midday Dairy Market Update - Butter Shows Further Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	7 Higher
SOYBEANS:	20 Higher
SOYBEAN MEAL:	$4.80 Higher
LIVE CATTLE:	$1.12 Lower
DOW JONES:	115 Points Higher
NASDAQ:	53 Points Higher
CRUDE OIL:	$1.01 Higher

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.25 cent to close at $1.57650 with two loads traded. The barrel cheese price remained unchanged at $1.5650 with no loads traded. The dry whey price slipped 0.25 cent to close at 69.25 cents with one load traded. The block cheese price continues to struggle with limited buyer interest. There were no unfilled bids remaining at the close of spot trading. Class III futures are 3 -- 15 cents lower in light trading and activity limited to 2026 contracts. The butter price declined 3.00 cents to close at $1.4300 with six loads traded. Sellers remain active with 48 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk gained 3.00 cents to close at $1.8100 with six loads traded. This is the ninth consecutive gain for the spot nonfat dry milk price. Class IV futures are steady to 35 cents lower, with trading activity confined to the September and October contracts. Butter futures are 0.05 -- 2.75 cents lower. Dry whey futures are 0.60 cent lower, with only the August contract showing activity. Cheese futures are 2.00 cents lower to 0.60 cent higher. Nonfat dry milk futures are 1.00 cent lower to 0.85 cent higher.

Wednesday Morning Dairy Market Update - Traders Uncertain Over Price Movement

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	9 to 11 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	Mixed

MILK:

Not much is expected to happen in Class III milk futures as the underlying cash prices for cheese and dry whey are expected to show little movement. The supply of milk remains sufficient for demand from bottlers and manufacturers. Cheese is available, leaving buyers unaggressive in the spot market. There have been a few days over the past week with no buyers showing up during spot trading. This limits price volatility in Class III milk futures. Class IV futures continue to find support from the strength of nonfat dry milk. The same may be true today.

CHEESE:

The market seems to be balanced. Trading activity has been limited, with buyers and sellers comfortable at the current price level. Cheese production is steady and sufficient to satisfy demand. This may keep cheese prices range-bound for the near term.

BUTTER:

The butter price is moving in a tighter range and may be building a level of support. However, the upside may be limited due to the volume of butter being offered on the spot market. Buyers have been able to purchase what they need for immediate demand as well as inventory for upcoming demand without having to chase the market higher.