Tuesday Midday Dairy Market Summary - Block Cheese Shows Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$2.90 Higher
LIVE CATTLE:	$0.12 Higher
DOW JONES:	436 Points Higher
NASDAQ:	349 Points Higher
CRUDE OIL:	$2.05 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 3.00 cents to close at $1.6600 with 3 loads traded. The barrel cheese price remained unchanged at $1.6275 with no loads traded. The dry whey price increased 0.25 cent to close at 69.75 cents with no loads traded. Class III futures traded mixed until spot trading and are now 4 cents lower to 22 cents higher, with the April contract showing the only loss. The butter price increased 0.25 cent to close at $1.5750 with 12 loads traded. The price initially declined to $1.5600 before buyers became more aggressive, with the price regaining the loss. Grade A nonfat dry milk decreased 2.00 cents to close at $1.4300 with 25 loads traded. The price initially declined 3.00 cents before retracing some of the loss. Class IV futures are 10-19 cents lower. Butter futures are 0.65 -- 5.50 cents lower. Dry whey futures are 0.45 cent lower to 1.45 cents higher. Cheese futures are steady to 1.70 cents higher. Nonfat dry milk futures are 0.42 to 1.42 cents lower.

Tuesday Morning Dairy Market Update - Traders May Buy the Break

OPENING CALLS:

Class III Milk Futures:	5 to 8 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	1 to 3 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	Mixed

MILK:

Class III milk futures were under substantial pressure on Monday despite the increase in cheese prices. Traders have not been taking long-term positions for quite some time and have been trading the volatility when possible. Some of the long positions established last week were unwound on Monday as traders decided to take some profits. That made Class III milk futures move in the opposite direction as indicated by spot trading. There is concern the upside potential of cheese may be limited, but a decline in futures will be viewed as a buying opportunity for hopefully trading a price bounce. Hedgers took advantage of the recent higher prices while traders are looking mainly to take a quick profit if they guess correctly.

CHEESE:

The block cheese price is nearing the high from two months ago, which is increasing the caution of traders. The spot market does not trade technically, but the reasons the cheese price fell back then may be similar now. The difference is it is nearer the time when demand increases for the fall and holidays.

BUTTER:

The butter price has not been able to find support since the end of June. With reduced cream supplies and plants running five days a week, steady retail demand, strong export demand, and lower inventories than a year ago, it would seem the market would be better supported. However, there is sufficient supply for demand, with buyers not yet ready to purchase aggressively for upcoming demand.

Monday Closing Dairy Market Update - Class III Milk Futures Slide on Profit-Taking

GENERAL OVERVIEW:

Milk futures were under pressure, with Class III futures showing the most weakness. Class IV futures were moderately lower. The weakness of Class III futures seems to be the result of sellers taking advantage of higher prices to establish short positions to hedge or to liquidate long positions for a profit.

MILK:

It was one of those days that did not make sense for the Class III market. The strength of spot cheese prices and a steady dry whey price should have provided support to the market. However, the traders decided to take some profits on previously established long positions, and hedgers sold them to establish short positions to protect milk prices. As selling pressured prices, further pressure ensued as positions needed to be established or profits needed to be protected. The pressure today may extend to the overnight session as the concern over further strength increased with the recent higher prices. Cheese supplies are sufficient for demand. Buyers may begin to look ahead to fall and holiday demand, but it is unlikely they will remain consistently aggressive. The August through November Class III futures are now above Class IV contracts for the same period.

AVERAGE CLASS III PRICES:

3 Month:	$16.91
6 Month:	$17.29
9 Month:	$17.33
12 Month:	$17.36

CHEESE:

The barrel cheese price has moved to the highest level since November 19, 2025. Aggressive buying over the past two weeks is an indication that demand for barrels has improved. Even though there has not been much activity on the daily spot market, the price reflects the demand in the country through regular channels. The block price has increased 24 cents from the low and is knocking on the door of the high of May 6, after which the price fell.

BUTTER:

The butter price remains in a range, but under pressure. Supplies are not overabundant, but sufficient to meet domestic and international demand. Inventory is below a year ago, but steady production leaves buyers comfortable with supplies and little concern over future supplies.

OUTSIDE MARKETS SUMMARY:

December corn closed up 5.50 cents per bushel at $4.7300, November soybeans closed up 23.25 cents at $12.2625, and December soybean meal closed up $5.30 per ton at $323.80. September Chicago wheat closed down 8.75 cents at $6.7400. August live cattle closed up $2.10 at $226.53. September crude oil is up $0.69 per barrel at $82.47. The Dow Jones Industrial Average is down 307 points at 51,839, with the NASDAQ down 12 points at 25,508.