Wednesday Midday Dairy Market Summary - Lower Spot Prices Fail to Pressure Futures

OUTSIDE MARKETS SUMMARY:

CORN:	10 Higher
SOYBEANS:	9 Higher
SOYBEAN MEAL:	$0.60 Higher
LIVE CATTLE:	$1.37 Lower
DOW JONES:	105 Points Higher
NASDAQ:	94 Points Higher
CRUDE OIL:	$0.33 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1.00 cent to close at $1.5950 with 9 loads traded. The barrel cheese price remained steady at $1.6000 with 3 loads traded. The dry whey price remained unchanged at 70.00 cents with no loads traded. Class III futures are steady to 3.00 cents higher. The butter price dropped 5.50 cents to close at $1.5850 with 13 loads traded. Grade A nonfat dry milk declined 2.75 cents to close at $1.50. The nonfat dry milk price may fall back to the previous low of $1.4750 made on July 7 and likely move below that level. Class IV futures have only traded in the July contract at unchanged from Tuesday. Butter futures are 2.07 cents lower to 1.00 cent higher on moderate volume. Dry whey futures are 0.25 cent lower to 0.02 cent higher. Cheese futures are 0.30 cent lower to 0.40 cent higher. Nonfat dry milk futures are 0.82 cent lower to 0.40 cent higher.

Wednesday Morning Dairy Market Update - Weakness Expected Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	3 to 5 Lower
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	16 to 20 Higher

MILK:

The weakness in Class III futures, despite the increase in cheese prices, was due to short-term profit-taking. This may continue ahead of spot trading Wednesday as traders try to take advantage of price swings. Hot weather is impacting milk production, reducing milk receipts at the plant level. This has some plants reaching out to the spot market for extra milk to maintain production levels. The forecast is for cooler weather later this week, providing some relief to the cows. It will be interesting to see how much milk production may improve after the hot weather subsides. Milk supplies are expected to remain sufficient for demand.

CHEESE:

Cheese prices have been increasing with both blocks and barrels at the highest level since May 13. The barrel price has no part of the Class III price calculation, but it is part of the cheese complex and an indicator of supply and demand. More barrels have been traded on the spot maket the past few weeks than had been traded during the entire first half of the year. Buyer interest is improving.

BUTTER:

The butter price is holding, but not trending higher. Buyers and sellers are comfortable at the current level. Retail demand has been improving. Butter manufacturers have reduced operations to five days a week as cream supplies have decreased. However, no shortage of supply is expected.

Tuesday Closing Dairy Market Update - Limited Volatility Results in Lower Prices

GENERAL OVERVIEW:

Most milk futures contracts closed lower despite the strength in the cheese and dry whey spot prices. Barrels have been showing more price movement and trading activity recently as demand improves and sellers are willing to move some supplies.

MILK:

It was another one of those days in which one would have thought Class III milk prices would have been higher. The strength in the cheese and dry whey prices should have provided further support. However, the increases of the past few days have already factored in the strength, resulting in traders who had previously bought into the market taking profits. This has been a pattern for quite some time, as much of the trading that is being done is short-term trading. Further weakness could unfold as selling generally takes place over two days before traders step back into the market in an attempt to trade market movement. The market sentiment seems to have turned somewhat bullish as buyer interest in cheese seems to be improving.

AVERAGE CLASS III PRICES:

3 Month:	$16.70
6 Month:	$17.23
9 Month:	$17.29
12 Month:	$17.33

CHEESE:

There has been more trading activity in barrels recently as buyers and sellers are willing to do more business on the spot market. For quite some time, there had been very little spot trading activity. Some of that limited activity was the result of the barrel price being removed from the Federal Order price calculation. It is uncertain as to why this was the case, but it seemed buyers and sellers were accomplishing their business outside of the daily spot market.

BUTTER:

The volatility of butter has declined substantially over the past two weeks. This indicates that current supply and demand seem to be balanced. Buyers have not had to aggressively bid for supplies. Sufficient butter is available through other channels.

OUTSIDE MARKETS SUMMARY:

December corn closed down 2.75 cents per bushel at $4.6050, November soybeans closed down 3.75 cents at $11.9100, and December soybean meal closed up $1.30 per ton at $316.30. September Chicago wheat closed up 9.75 cents at $6.4500. August live cattle closed down $3.30 at $231.43. August crude oil is up $1.20 per barrel at $79.34. The Dow Jones Industrial Average is up 10 points at 52,508, with the NASDAQ up 234 points at 26,107.