Wednesday Closing Dairy Market Update - Butter Bounce

GENERAL OVERVIEW:

After a rough start to the week, butter made a small comeback in the cash trade today with even more of a bounce this afternoon in the futures market.

MILK:

Milk had a disappointing day with Class III trading 18 cents lower for October and November as well as Class IV futures falling 24 to 31 cents by the end of the trading session. Grade A nonfat milk was 2 cents lower in the cash market and futures were trading closer to 3 to 4.2 cents lower. USDA released the DMC prices yesterday with the highest feed costs of the year for the July data. August feed costs are expected to be much higher with the large rally in prices we've seen over the last couple of weeks. What that means for cow retention and milk production is still to be determined as we inch closer to winter.

AVERAGE CLASS III PRICES:

3 Month:	$16.60
6 Month:	$17.86
9 Month:	$17.07
12 Month:	$17.24

CHEESE:

Cheese is trending about 3 cents lower on average this week versus last week. The cash market was unchanged which is impressive given the 33 loads that traded in the Cheddar Block category. Futures had more weakness this afternoon, trading 0.8 to 1.7 cents lower. Tomorrow we will have the Dairy Products report released by USDA to give a better look at production data.

BUTTER:

Butter traded 1.5 cents higher during the cash auction this morning. There are still a large amount of offers left unfulfilled at the close each day, however, today there were also 16 bids left standing. Butter is a deal right now and the market has plenty to offer. Buyers have done well the last few years by taking advantage of late summer pricing to fill orders for the holiday season.

OUTSIDE MARKETS SUMMARY:

October live cattle closed down $1.90 at $210.18. October crude oil is up .79 per barrel at $91.01. The Dow Jones Industrial Average is up 295 points at 53,061 and NASDAQ is up 118 points at 26,217.

Wednesday Midday Dairy Market Summary - Butter Turned Higher

OUTSIDE MARKETS SUMMARY:

CORN:	2 Higher
SOYBEANS:	1 Lower
SOYBEAN MEAL:	$0.16 Higher
LIVE CATTLE:	$0.28 Lower
DOW JONES:	270 Points Higher
NASDAQ:	89 Points Higher
CRUDE OIL:	$0.96 Higher

MIDDAY MARKET UPDATE:

The block cheese price is unchanged closing at $1.4750 with 33 loads traded. There were 4 uncovered offers remaining at the close of spot trading. The barrel cheese price also went unchanged at $1.5325 with no loads traded. The dry whey price went unchanged at 74 cents with no loads traded and 2 uncovered offers remaining at the close of the spot trading. Class III futures are 6 cents to 18 cents lower. The butter price was up 1.50 cents to close at $1.4075 with 19 loads traded. There were 16 unfilled bids and 61 uncovered offers remaining at the close. Grade A nonfat dry milk lost 2 cents to close at $1.88 with eight loads traded and two uncovered offers remaining at the close. Class IV futures are anywhere from unchanged to 10 cents lower. Butter futures are 1.70 to 0.50 cents lower. Dry whey futures are mixed at 0.25 cents lower to steady. Cheese futures are 0.06 to 0.17 cent lower. Nonfat dry milk futures are 2.175 to 3.175 cents lower.

Wednesday Morning Dairy Market Update - Dairy Margin Coverage Prices Announced for July

OPENING CALLS:

Class III Milk Futures:	1 to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	5 to 8 Lower
Soybean Futures:	12 to 14 Lower
Soybean Meal Futures:	$0.40 to $0.50 Lower
Wheat Futures:	9 to 11 Lower

MILK:

Dairy Margin Coverage prices were released Tuesday with the final milk margin above feed costs for the program at $9.93, down 95 cents from March. While the July calculations have corn and hay costs lower than June, soybean meal was higher. However, the greater impact on that calculation was derived from an 80-cent drop in the all-milk price -- the lowest we have seen since spring.

CHEESE:

Cheese saw some pressure led by the cash market Tuesday with barrels taking the biggest hit. Most of the market pressure is due to the time of year, lacking much retail demand. Overnight trade found minuscule gains in the early evening hours but mixed by morning.

BUTTER:

Butter had a rough day Tuesday with the cash market falling apart and bringing futures down with it. Overnight trade has been mixed, although traders do not anticipate support for butter anytime soon. The massive amounts of offers for loads of butter left standing at the close of the cash auction each day show the availability of butter is plentiful.