Friday Closing Dairy Market Update - Butter Price Falls Substantially for the Week

OVERVIEW:

Class III futures closed mixed, with traders uncertain of price direction due to steady cheese prices. Class IV futures were steady to lower due to the weakness of the butter price. The feed and milk prices decreased in July compared to June.

MILK:

Class III milk futures closed mixed as the underlying cash price showed little direction. Futures gained slightly for the week amidst the volatility. Class IV futures were not AS fortunate, as prices declined substantially due to the weakness of the butter price. Milk futures do not follow the pattern of seasonal strength at this time of year. The USDA released the July Agricultural Prices report. The average corn price was $4.29 per bushel, down $0.18 from June. The average premium/ supreme hay price was $245.00 per ton, up $1.00 per ton from June and up $8.00 from July 2024. The All-milk price was $20.80, down $0.50 per cwt from June and down $2.00 per cwt from a year ago. The average soybean meal price will be released next week, completing the reporting of the prices used to calculate income over feed for the Dairy Margin Protection program. Other prices to take note of are the alfalfa hay average price in July, which was $173.00 per ton, down $4.00 per ton from June and down $10.00 per ton from a year ago. The soybean price was $10.20 per bushel, down $0.20 from June and down $1.10 from July 2024. The average price for a dairy cow was $3,010.00 in July compared to $2,360.00 in July 2024.

AVERAGE CLASS III PRICES:

3 Month:	$17.72
6 Month:	$17.65
9 Month:	$17.62
12 Month:	$17.64

CHEESE:

For the week, blocks increased 2.50 cents with 16 loads traded. The weekly average price was $1.7830. Barrels increased 2.00 cents with no loads traded. The weekly average price was $1.7810. Dry whey increased 1.50 cents with 10 loads traded. The weekly average price was 56.30 cents.

BUTTER:

For the week, butter fell 19.00 cents with 17 loads traded. The weekly average price was $2.1210. Grade A nonfat dry milk was unchanged at $1.26 with 21 loads traded. The weekly average price was $1.2570. Butter fell to a new low for the year, with the price falling back to the lowest level since Dec. 6, 2021.

OUTSIDE MARKETS SUMMARY:

December corn closed up 10.25 cents per bushel at $4.2025, November soybeans closed up 6.50 cents at $10.5450 and December soybean meal closed up $1.70 per ton at $289.00. December Chicago wheat closed up 5.25 cents at $5.3425. October live cattle closed up $2.73 at $239.65. October crude oil is down $0.59 per barrel at $64.01. The Dow Jones Industrial Average is down 92 points at 45,545, with the NASDAQ down 250 points at 21,456.

Friday Midday Dairy Market Summary - Butter Falls to New Low For Year

OUTSIDE MARKETS SUMMARY:

CORN:	10 Higher
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$2.00 Lower
LIVE CATTLE:	$1,72 Higher
DOW JONES:	112 Points Lower
NASDAQ:	265 Points Lower
CRUDE OIL:	$0.62 Lower

MIDDAY MARKET UPDATE:

Both block and barrel prices remained unchanged at $1.7750 and $1.7800, respectively, with no loads traded. There was an uncovered offer for a load of barrels with an unfilled bid, and 2 uncovered offers remaining for blocks at the close of spot trading. The dry whey price increased 1.50 cents, closing at 57.00 cents with 2 loads traded. Class III futures are 14 cents lower to 9 cents higher. The butter price fell back 4.00 cents to close at $2.0450, taking back the gain of Thursday and then some, moving to a new low for the year with one load traded. Grade A nonfat dry milk remained unchanged at $1.2600. Class IV futures are 14 to 20 cents lower. Butter futures are 1.52 to 4.65 cents lower. Dry whey futures are 1.25 to 2.97 cents higher. Cheese futures are 1.10 cents lower to 0.20 cent higher. USDA will release the July Agricultural Prices report Friday afternoon, providing the average prices for agricultural products for the month.

Friday Morning Dairy Market Update - Milk Futures May Find Little Price Direction

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	3 to 5 Lower
Soybean Meal Futures:	$0.50 to $1.00 Lower
Wheat Futures:	Mixed

MILK:

There has been little change in fundamentals in the dairy industry. Milk futures may continue to chop around at the current levels with little solid direction. Milk futures being unable to trend higher during this time of year is unusual. Demand seasonally increases, resulting in increased buying interest on the spot market. So far, the buying interest has not been aggressive, with sellers continuing to offer supplies to the market. Higher milk production than last year is keeping the market supplied with milk. USDA will release the July Agricultural Prices report this afternoon, providing the average prices used in the income over feed calculation for the Dairy Margin Coverage program. The average soybean meal price is not in the report and will not be released until Tuesday.

CHEESE:

Cheese prices may have limited upside potential as supply and demand seem to be balanced. Price increases generate selling interest as plants want to move supplies rather than build inventory. Lower prices find buying interest as buyers look ahead to holiday demand. Buyers see no need to chase the market higher, and sellers see no need to hold supplies.

BUTTER:

The bounce in the butter price on Thursday was the interest of buyers to purchase butter due to the low price, and not because the market has bottomed and the price will trend higher. It may be difficult for the price to see much upside potential considering the current fundamentals. Cream supply is available, and churning is active. The supply of butter is sufficient to meet demand and reduce the volume needed to be supplemented from inventory.