Wednesday Morning Dairy Market Update - Mixed Futures Prices Expected

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

MILK:

Class III milk futures on Tuesday closed mixed with that pattern continuing overnight. The World Agricultural Supply and Demand report showed a slight increase in milk production this year and slightly higher output for 2027, but that will not influence the market. Milk production continues to remain higher than a year ago, providing a plentiful supply of milk for bottling and manufacturing. Most colleges and universities are closed for the summer with school systems closing over the next few weeks. This will move more milk to manufacturing. The spot market will indicate the level of supply and demand for the time being.

CHEESE:

Cheese prices are expected to remain in a tight range as the spring flush continues and sufficient milk is available for the vat. Buyers see no need to be aggressive as plants want to limit building inventory.

BUTTER:

The butter price has been able to hold most of the gains since the low established on May 4. This has been encouraging as demand has improved due to lower prices. Exports remain phenomenal with the March volume doubling that of a year ago. Trading activity on the spot market is good as butter in being purchased for immediate needs and not to build inventory.

Tuesday Closing Dairy Market Update - USDA Raises Its Milk Production Estimates

GENERAL OVERVIEW:

It was somewhat of an uneventful day as Class III futures were mixed with moderate trading volume. Steady cheese and dry whey prices left little for traders to hang their hats on. Class IV futures were under more pressure despite unchanged butter and nonfat dry milk prices. USDA estimates milk output this year at 235.4 billion pounds and next year at 236.0 billion pounds.

MILK:

Traders did not have much to provide volatility or price direction in the milk futures market. The World Agricultural Supply and Demand Estimates (WASDE) report was released today. USDA raised its estimate for milk production this year by 100 million pounds to a total of 235.4 billion pounds. They also released initial estimates for 2027 with milk production of 236.0 billion pounds. This was a low initial estimate, as the thinking might be that culling may increase at some point, reducing the dairy herd. Expansion may slow down due to increased costs and low milk prices. The USDA increased its estimates for milk prices for this year from the April report. The average Class III price was raised $0.10 per cwt to $17.00. The Class IV price was raised $1.35 per cwt to $19.95. The All-milk price was raised $0.75 to $21.25 per cwt. The initial estimate for 2027 is for the Class III milk price to average $17.55. The initial estimate for Class IV is $18.60. The All-milk price is estimated to average $20.95. This does not hold much hope for higher prices throughout next year.

AVERAGE CLASS III PRICES:

3 Month:	$17.38
6 Month:	$18.01
9 Month:	$18.09
12 Month:	$18.01

CHEESE:

The average cheese price for this year was raised 0.50 cents to $1.65 per pound from the April estimate. The initial estimate for 2027 is $1.7150 per pound. The average dry whey price was raised this year by 0.50 cents to 66.50 cents per pound. The initial estimate for 2027 is for a price of 64.00 cents per pound.

BUTTER:

The average butter price was reduced on the World Agricultural Supply Demand report to $1.7250 per pound, down $0.09 from April. The initial estimate for 2027 is for the price to average $1.82 per pound. Nonfat dry milk was raised by $0.1950 to average $1.77 per pound. This initial estimate for 2027 was released at $1.5750 per pound.

OUTSIDE MARKETS SUMMARY:

July corn closed up 4.75 cents per bushel at $4.8000, July soybeans closed up 13.75 cents at $12.2675, and July soybean meal closed up $3.60 per ton at $328.40. July Chicago wheat closed up 45.00 cents at $6.7900. June live cattle closed down $1.70 at $247.70. June crude oil is up $3.93 per barrel at $102.00. The Dow Jones Industrial Average is up 56 points at 49,761, with the NASDAQ down 186 points at 26,088.

Tuesday Midday Dairy Market Summary - Spot Prices Provide Little Direction

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$3.30 Higher
LIVE CATTLE:	$1.47 Lower
DOW JONES:	13 Points Lower
NASDAQ:	390 Points Lower
CRUDE OIL:	$3.58 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.75 cent to close at $1.63 with seven loads traded. It was positive to see the price gain, but it had little impact on Class III milk futures. The barrel cheese price remained unchanged at $1.60 with no loads traded. The dry whey price remained unchanged at 70.00 cents with no loads traded. Class III futures are mixed, ranging from 3 cents to 9 cents higher. The butter price remained unchanged at $1.6450 with 25 loads traded. The price initially declined to $1.6075 before buyers became more aggressive, bringing the price back up to unchanged. There were 14 unfilled bids and 15 uncovered offers remaining at the close of spot trading, possibly indicating a balanced market. Grade A nonfat dry milk remained unchanged at $2.2850 with no loads traded. Class IV futures are 9-22 cents lower. Butter futures are 0.62 - 4.27 cents lower. Dry whey futures are 1.20 cents lower to 0.15 cent higher. Cheese futures are 0.40 cent lower to 1.10 cents higher. The USDA raised its estimate for milk production this year by 100 million pounds to 235.4 billion pounds, with its initial estimate for 2027 at 236.0 billion pounds.