Monday Closing Dairy Market Update - Lackluster Trading Activity

GENERAL OVERVIEW:

Class III futures were mixed but mostly lower. The slight weakness of the block cheese price, with no buyers showing up to the spot market, maintained a negative tone. Class IV futures extended their gains.

MILK:

Trading volume was moderate in Class III futures with contracts mixed, but mostly lower. No buyers showed up during spot cheese trading, which added to the slight negativity of the market. With fundamentals remaining much the same as they have been over the past weeks, there is little to generate much volatility in milk futures. It was a little surprising that there were over 700 contracts traded as futures moved only 24 cents from high to low. Class IV futures did not experience much volatility, but the contracts that traded posted higher prices. The September Class IV contract is nearly $2.00 over the September Class III contract. It was only a couple of weeks ago that they were nearly at the same price. Milk production across the country is sufficient for demand from bottling and manufacturing. Spot milk is less available as more is moving to bottling for school accounts.

AVERAGE CLASS III PRICES:

3 Month:	$17.06
6 Month:	$17.24
9 Month:	$17.31
12 Month:	$17.46

CHEESE:

Mixed cheese prices today kept concern over the potential for prices moving forward.

Cheese production is steady and sufficient for demand. Increased buying from packagers and recutters generally increases during this time of year. However, buyers may have sufficient supplies readily available to them that may limit their need to be aggressive.

BUTTER:

The bounce in butter today is the result of doing regular business. There is little reason to indicate a change in trend as supplies remain sufficient. There continue to be willing sellers as there has been a substantial volume of uncovered offers remaining at the close of spot trading for some weeks.

OUTSIDE MARKETS SUMMARY:

December corn closed up 6.25 cents per bushel at $4.8950, November soybeans closed up 23.50 cents at $12.1600, and December soybean meal closed up $2.40 per ton at $318.70. September Chicago wheat closed steady at $6.7475, and October live cattle closed down $0.10 at $218.78. September crude oil is up $2.10 per barrel at $84.50. The Dow Jones Industrial Average is down 273 points at 53,460, with the NASDAQ down 84 points at 26,645.

Monday Midday Dairy Market Summary - Nonfat Dry Milk Plods Higher

OUTSIDE MARKETS SUMMARY:

CORN:	7 Higher
SOYBEANS:	23 Higher
SOYBEAN MEAL:	$1.80 Higher
LIVE CATTLE:	$0.90 Higher
DOW JONES:	327 Points Lower
NASDAQ:	76 Points Lower
CRUDE OIL:	$1.98 Higher

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.25 cent to close at $1.5975 with no loads traded. The weakness with no buyers showed up during spot trading keeps a negative tone to the market. The barrel cheese price increased 0.25 cent to close at $1.5650 with no loads traded. The dry whey price increased 0.50 cent to close at 69.50 cents with no loads traded. Class III futures are 13 cents lower to 5 cents higher. The butter price increased 1.25 cents to close at $1.4725 with 21 loads traded. There were 24 unfilled bids and 52 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 0.75 cent to close at $1.7525 with nine loads traded. Class IV futures are 4-15 cents higher. Butter futures are 0.90 -- 4.22 cents higher. Dry whey futures are unchanged to 0.25 cent lower. Cheese futures are 1.70 cents lower to 0.40 cent higher. Nonfat dry milk futures are 1.00 -- 3.95 cents higher.

Monday Morning Dairy Market Update - Traders Expect Limited Price Movement

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	6 to 8 Lower

MILK:

Market fundamentals have changed little over the past weeks, leaving trading activity confined to scalping rather than long-term positions. Price increases have been met with increased selling pressure. Lower prices increased buying interest in the cash market. Market volatility is being exploited through short-term trades with limited profit. One could say the market is stuck. More milk is moving to bottling for school accounts, while milk production is improving and remains above a year ago, offsetting the shift in demand.

CHEESE:

Spot cheese prices are expected to remain range-bound as buyers and sellers take care of business. Buyers see little reason to purchase aggressively and build inventory, while sellers want to move supplies to limit building inventory. Prices will remain choppy.

BUTTER:

Butter remains in a downtrend with buyers able to purchase supplies without having to remain aggressive. Churning remains active, supplying sufficient butter for demand. The large volume of loads traded on the spot market is allowing buyers to purchase for immediate demand and upcoming demand without having to chase the market higher. This may reduce buying aggressiveness later in the year.