Friday Morning Dairy Market Update - Traders Wait for Price Direction

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Higher
Soybean Futures:	5 to 7 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	12 to 14 Higher

MILK:

The large increase in Class IV milk futures on Thursday did not carry over into overnight trade. Class IV contracts generally do not trade overnight as bids and offers are far apart. Higher futures are expected as trading activity increases during the day. Class III traders will take a wait-and-see attitude before making any strong commitments. Beef cattle prices have been declining, which has reduced calf prices and some of the extra income from those calves. However, even with lower prices, beef-on-day calves will continue to be an integral part of the dairy operation. Dairy cattle slaughter is not expected to increase significantly anytime soon.

CHEESE:

The block cheese price has had a nice bounce this week, but the concern is whether it will hold. Traders have been cautious in Class III futures as futures remain close to what they were a week ago. Demand is good, and cheese production is steady.

BUTTER:

There have been a lot of loads of butter traded on the spot market so far this week. Immediate orders are being filled without difficulty, and inventory is being added to in preparation for fall and holiday demand. Cream supplies are not abundant, but sufficient to maintain an active churning schedule. The price may remain choppy.

Thursday Closing Dairy Market Update - Traders Wait for Price Direction

MILK:

The large increase in Class IV milk futures on Thursday did not carry over into overnight trade. Class IV contracts generally do not trade overnight as bids and offers are far apart. Higher futures are expected as trading activity increases during the day. Class III traders will take a wait-and-see attitude before making any strong commitments. Beef cattle prices have been declining, which has reduced calf prices and some of the extra income from those calves. However, even with lower prices, beef-on-day calves will continue to be an integral part of the dairy operation. Dairy cattle slaughter is not expected to increase significantly anytime soon.

CHEESE:

The block cheese price has had a nice bounce this week, but the concern is whether it will hold. Traders have been cautious in Class III futures as futures remain close to what they were a week ago. Demand is good, and cheese production is steady.

BUTTER:

There have been a lot of loads of butter traded on the spot market so far this week. Immediate orders are being filled without difficulty, and inventory is being added to in preparation for fall and holiday demand. Cream supplies are not abundant, but sufficient to maintain an active churning schedule. The price may remain choppy.

Fluid Milk and Cream - Western U.S. Report 33

Milk and cream production are mixed in the West, and output is being affected by hot weather, fires, and smoke. 

California milk production is showing small increases week-over-week, with some producers reporting planned maintenance. 

In the mountain states, high temperatures persist and are not cooling off at night. Farm-level milk output in Idaho is tight, while contacts in Utah report heavy milk production despite ongoing fires and smoke. 

Production in the Pacific Northwest is steady. Class I demand is increasing as schools reopen. Class II demand is soft, while Class III and IV demands remain steady. 

Stakeholders describe cream supplies as long, though contracts are being met. Cream multiples moved slightly higher at the top of the range this week. Cream demand is steady. Condensed skim milk loads are available, and demand for condensed skim is somewhat stronger.