Fluid Milk and Cream - Western U.S. Report 28

California milk production is seasonally decreasing but still supplying the needs of dairy commodity manufacturers. Processors report milk and cream production is high enough to push back any anticipated equipment downtime at their facilities. Stakeholders indicate no changes to spot milk load availability. 

Farm level milk output is lighter in Arizona. Some processing equipment issues are reducing manufacturing capacity, making spot loads of milk more available. 

Farm level milk output is lighter in New Mexico. 

Milk production in the Pacific Northwest is seasonally lighter. Manufacturers report contractual intakes are being received, but spot loads of milk are tight. 

Stakeholders note temperatures are heating up for dairy farms east of the Cascades and triple digits are forecasted for at least parts of Idaho, anticipating a toll on milk production. Utah and Colorado handlers indicate week-to-week milk production varies from steady to lighter. Spot loads of milk are available in the mountain states. 

Class I, II, III, and IV demands are steady. Cream production is meeting contractual commitments and spot load needs. Cream multiples moved lower at the top of both ranges. Cream demand is steady. Condensed skim milk loads are available and demand is steady, but some buyers note transportation availability is tighter.

Thursday Midday Dairy Market Summary - Milk Futures Jump

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	14 Lower
SOYBEAN MEAL:	$4.60 Higher
LIVE CATTLE:	$2.65 Lower
DOW JONES:	190 Points Higher
NASDAQ:	315 Points Higher
CRUDE OIL:	$1.97 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 6.00 cents to close at $1.5650 with 8 loads traded. The barrel cheese price increased 3.00 cents to close at $1.5500 with 3 loads traded. The dry whey price increased 1.25 cents to close at 68.50 cents with no loads traded. This provided a boost to Class III futures with contracts ranging from 5-66 cents higher. The butter price remained unchanged at $1.6500 with 2 loads traded. Grade A nonfat dry milk increased 5.00 cents with 35 loads traded. Buyers came out of the woodwork. There were 16 unfilled bids and 7 uncovered offers remaining at the close. Class IV futures are 12-31 cents higher. Butter futures are 1.50 cents lower to 1.25 cents higher. Dry whey futures are 0.25 -- 0.50 cent higher. Cheese futures are 0.20 -- 5.60 cents higher. Nonfat dry milk futures are 1.75 -- 4.30 cents higher.

Thursday Morning Dairy Market Update - Overnight Trade Steady as It Goes

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Lower
Soybean Futures:	4 to 6 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	Mixed

MILK:

Market fundamentals continue to follow seasonality with reduced milk output due to summer weather. This has not impacted the market to any great extent due to increased cow numbers and higher milk production. Whether increasing demand will be enough to tighten supplies sufficiently to support milk prices remains to be seen. Milk futures indicate there will be little upside price potential for quite some time unless something significant changes the market. The increased milk supply from a year ago is being handled easily. Spot milk prices are stronger than usual for this time of year as increased plant capacity has resulted in more demand for milk to keep processing facilities running efficiently.

CHEESE:

The block cheese price showed a nice increase on Tuesday, but may have met buyer resistance due to the slight weakness on Wednesday. The buying strength may have been the result of concern about the hot weather and how it may impact milk production. However, there is sufficient cheese available for demand, which may limit upside price potential.

BUTTER:

International demand for butter and butterfat remains strong with record exports again reported for May. Although exports have been phenomenal, it has not had sufficient impact on the market price. Butter production has been sufficient to meet demand. Buyers remain confident over the continued availability of supplies.