Wednesday Midday Dairy Market Summary - Block Cheese Moves Lower

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$2.20 Lower
LIVE CATTLE:	$2.27 Higher
DOW JONES:	444 Points Higher
NASDAQ:	129 Points Lower
CRUDE OIL:	$1.17 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 4.00 cents to close at $1.52 with four loads traded. This is the lowest price since July 8th. The barrel cheese price remained unchanged at $1.5475 with no loads traded. The dry whey price slipped 0.25 cents to close at 68.75 cents with no loads traded. Class III futures are 35 cents lower to 1 cent higher. The butter price slipped 0.25 cent to close at $1.4825 with one load traded. Grade A nonfat dry milk increased 3.00 cents to close at $1.60 with five loads traded. This is the highest price since July 1. Class IV futures are 7 -- 17 cents higher. Butter futures are 2.77 cent lower to 1.50 cents higher. Dry whey futures are 0.05 cent lower to 0.10 cent higher. Cheese futures are steady to 3.40 cents lower. Nonfat dry milk futures are 0.52 -- 2.27 cents higher.

Wednesday Morning Dairy Market Update - Mixed Activity Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 6 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	5 to 6 Lower
Soybean Futures:	6 to 9 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	Mixed

MILK:

Traders did not receive any indication as to further direction for the market on Tuesday. Steady spot prices for cheese and butter may either indicate support or resistance. The current level of milk production is sufficient for demand. Sufficient supplies may limit the upside potential for prices. More milk moving to bottling over the coming weeks is not expected to tighten the supply and raise prices. Consumer demand will need to improve to keep up with increased milk production when cooler weather arrives. Traders continue to trade only for the short term rather than establish long-term positions. The June Federal Order class prices will be announced Wednesday afternoon. The trade anticipates a Class III price of $15.63 and a Class IV price of $18.49.

CHEESE:

Cheese prices seem supported but may have limited near-term upside potential. Buyers seem to have sufficient supplies on hand and remain comfortable purchasing on an as-needed basis. Price declines allow them to purchase more for building inventory. Demand will improve as the year progresses, but whether it will follow the usual increase is uncertain.

BUTTER:

It would seem that the butter price would find support at the current level as churns are operating on five-day weeks. Cream supplies have tightened with the production of Class III products utilizing a significant volume of cream.

Tuesday Closing Dairy Market Update - Traders Show Disappointment

GENERAL OVERVIEW:

Class III futures closed mixed while Class IV futures closed lower in most contracts. Traders resigned to the fact that the market may not be ready to trend higher. Tuesday is the last day to trade July futures and options.

MILK:

The early anticipation of strength in the spot market did not come to fruition. Cheese and butter prices took a pause, leaving traders wondering whether prices will have sufficient strength to turn higher or whether sellers will become impatient and lower their offers. Discussions revolve around whether buyers will step up to the plate soon and purchase supplies to build inventory in preparation for upcoming demand or whether they will remain comfortable purchasing on an as-needed basis. Milk production continues to remain above a year ago. Time is running out for hot weather to have an impact on milk output. August can have plenty of hot days that could impact production, but two months of the summer are already behind us. We will see the full impact of the hot weather when the July Milk Production report is released later this month. Milk production and components have been impacted, but many producers indicate their cows are holding production well. The July Federal Order class prices will be released on Wednesday. The trade anticipated a Class III price of $15.63 and a Class IV price of $18.49.

AVERAGE CLASS III PRICES:

3 Month:	$17.27
6 Month:	$17.43
9 Month:	$17.47
12 Month:	$17.54

CHEESE:

Buyers generally turn more aggressive during this time of year as they look ahead to fall and holiday demand. Packagers and recutters step up more aggressively to procure the cheese they need to build inventory for packaging for gift boxes and holiday promotions. They generally will not wait until they need it. The unknown is whether they have already been purchasing and may not need to be as aggressive as the year progresses.

BUTTER:

Sellers were not interested in selling any butter on the spot market today. There were 58 uncovered offers placed during spot trading, but none of the offers were reduced to get any business done. With reduced cream supplies and churning activity, plants may not need to move inventory with any urgency.

OUTSIDE MARKETS SUMMARY:

December corn closed down 7.00 cents per bushel at $4.6550, November soybeans closed down 14.50 cents at $11.7775 and December soybean meal closed down $3.20 per ton at $318.40. September Chicago wheat closed down 12.50 cents at $6.3850. October live cattle closed up $1.18 at $227.90. September crude oil is down $5.17 per barrel at $75.17. The Dow Jones Industrial Average is up 907 points at 54,086, with the NASDAQ up 671 points at 26,585.