Monday Closing Dairy Market Update - Milk Futures Post a Strong Close

GENERAL OVERVIEW:

Milk futures posted another strong day, with most of the strength in Class IV contracts. The increase in butter and nonfat dry milk prices provided strong support. The May Agricultural Prices report showed an increase in all prices used in calculating income over feed.

MILK:

Milk futures had a very strong day in response to the increase in spot prices. Block cheese only had a minor increase, but strength also came from the increase in the butter price. Class IV futures showed the greatest gain. The August contract gained about $1.80 over the past 3 days. The July, October, and November contracts are back above $19.00. It seems like seasonal buying is kicking in, which is driving the price higher. Seasonal buying does not seem to have begun in cheese, and maybe it will not to any great extent. However, historically butter leads the direction of the market and may trigger more aggressive buying interest in cheese. The May Agricultural Prices report showed an average corn price of $4.48 per bushel, up $0.17 from April, but down $0.18 from April 2025. The average premium/supreme hay price was $247.00 per ton, up $13.00 per ton from April, but down $30.00 per ton from April 2025. The All-milk price was $21.30 per cwt, up $0.50 from April, but down $0.10 from a year earlier. The average soybean meal price will be released on Tuesday, providing the final price to calculate income over feed for the Dairy Margin Coverage program. Other prices for comparison are the average soybean price at $11.60, up $0.40 from April and $1.20 per bushel higher than a year ago.

AVERAGE CLASS III PRICES:

3 Month:	$16.10
6 Month:	$16.85
9 Month:	$17.04
12 Month:	$17.12

CHEESE:

Cheese prices may continue to struggle due to supplies being sufficient for demand. Buyers have been complacent and not willing to build inventory. The upside price potential may be limited in the near term.

BUTTER:

The continued increase in butter and the large jump in the nonfat dry milk price set the stage for higher prices, as buyers may step into the market to purchase to get ahead of increasing prices. Seasonal buying may also be taking place. Increasing temperatures will impact the butterfat level in milk, which could reduce cream supplies.

OUTSIDE MARKETS SUMMARY:

July corn closed down 10.75 cents per bushel at $4.0200, November soybeans closed down 17.25 cents at $11.3900, and July soybean meal closed down $2.30 per ton at $304.70. September Chicago wheat closed down 10.00 cents at $5.7975. August live cattle closed down $2.25 at $243.58. August crude oil is up $1.52 per barrel at $70.75. The Dow Jones Industrial Average is up 307 points at 52,183, with the NASDAQ up 523 points at 25,820.

Monday Midday Dairy Market Summary - Nonfat Dry Milk Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	14 Lower
SOYBEANS:	19 Lower
SOYBEAN MEAL:	$4.50 Lower
LIVE CATTLE:	$2.32 Lower
DOW JONES:	293 Points Higher
NASDAQ:	459 Points Higher
CRUDE OIL:	$1.68 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent to close at $1.4225 with 7 loads traded. The price initially declined to $1.4075 before buying interest became more aggressive, moving the price back to positive territory. The barrel cheese price remained unchanged at $1.4800 with no loads traded. The dry whey price remained unchanged at 68.50 with no loads traded. Class III futures are 1 cent lower to 14 cents higher. The butter price increased 5.00 cents to close at $1.7000 with 2 loads traded. There were 3 unfilled bids and 26 uncovered offers. This would suggest there is limited upside potential. Grade A nonfat dry milk jumped 10.00 cents to close at $1.6975 with 22 loads traded. There were 10 unfilled bids and 10 uncovered offers remaining at the close. Class IV futures are 5-96 cents higher. Butter futures are 1.77 -- 4.50 cents higher. Dry whey futures are 0.50 -- 0.75 cent higher. Cheese futures are 0.90 cent lower to 1.50 cents higher. Nonfat dry milk futures are 1.50 -- 7.67 cents higher. USDA will release the May Agricultural Prices report today, providing most of the prices used to calculate income over feed for the Dairy Margin Coverage program.

Monday Morning Dairy Market Update - Significant Trading Activity, Higher Prices Overnight

OPENING CALLS:

Class III Milk Futures:	8 to 12 Higher
Class IV Milk Futures:	10 to 15 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	7 to 9 Lower
Soybean Futures:	9 to 11 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	5 to 6 Lower

MILK:

Traders were active in overnight trade. Futures were higher in the Class III contracts, except for June. Tuesday is the last day to trade June futures and options and the June Federal Order prices will be announced Wednesday. Surprisingly, there were 129 contracts traded in June overnight, as it is a cash-settled contract and mostly priced by the trade. July had over 200 contracts traded, with August over 100. Other contract months also had trading activity. Class IV futures had activity in the September and October contracts. USDA will release the May Agricultural Prices report Monday afternoon. This report will provide most of the prices used in calculating income over feed for the Dairy Margin Coverage program.

CHEESE:

Cheese futures traded overnight in the July and August contracts with July showing most of the activity. The block cheese price is expected to remain choppy. Cheese is readily available to the market with buyers not aggressively picking up supplies to build inventory.

BUTTER:

Butter and nonfat dry milk futures were traded overnight. Contracts were higher as traders seem to think seasonal buying may surface. Nonfat dry milk showed significantly higher prices in the July through December contracts. The upside price potential is uncertain.