Wednesday Midday Dairy Market Update - Butter Buyers Come to the Table

OUTSIDE MARKETS SUMMARY:

CORN:	20 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$0.25 Lower
LIVE CATTLE:	$2.03 Higher
DOW JONES:	66Points Lower
NASDAQ:	242 Points Higher
CRUDE OIL:	$1.64 Lower

MIDDAY MARKET UPDATE:

The block cheese price traded 0.50 cent lower today closing at $1.2700 with 3 loads traded. The barrel cheese price was unchanged at $1.4525 with no loads traded. The dry whey price climbed 0.50 cent, closing at 81.50 cents with 1 load traded. Class III futures are trading anywhere from 2 to 30 cents higher here at the midday point. The butter price was up at 4.25 cents with 28 loads traded. There were 18 unfilled offers and 92 bids remaining at the close. Grade A nonfat dry milk was 0.75 cents higher at $2.20 with 2 loads traded. Class IV futures are mixed from 5 cents lower to 25 cents higher. Butter futures are 0.025 to 1.25 cents lower. Dry whey futures are trading 0.25 cents to 1 cent lower. Cheese futures are 0.4 to 2.1 cents higher. Nonfat dry milk futures are 0.35 lower to 3.50 cents higher. 

Wednesday Morning Dairy Market Summary - Butter May Be Near Support

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Higher
Soybean Futures:	7 to 8 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	6 to 7 Higher

MILK:

It hurts to look at the Class III futures prices. The October contract is now the lead month with a price of $14.93. It has been quite some time since the Class III price has fallen below $15.00. If the current futures prices remain through the end of the year, it will be very difficult financially to cash flow. On the other hand, Class IV prices continue to increase, supported by strong nonfat dry milk. The dry whey price has reached the highest level in four years, with nonfat dry milk moving near the highs of early May. The Quarterly Grain Stocks report will be released today and may have an impact on feed prices depending on the level of grain on hand. The Agricultural Prices report will be released this afternoon, providing most of the prices used to calculate income over feed for the Dairy Margin Coverage program.

CHEESE:

This is not much to be said about the block cheese market, as sellers continue to offer supplies to the spot market at lower prices. The price falling back to the lowest level in more than six years at the time of year when both demand and prices usually increase does not bode well for the market.

BUTTER:

The butter price is only 1.75 cents above the lows of the year. The price may be low enough to generate greater buying interest, as there were 41 unfilled bids remaining at the close of spot trading. This may indicate buyer support may be near. However, the upside price potential may be limited 

Tuesday Closing Dairy Market Update - Milk Prices Continue to Diverge

GENERAL OVERVIEW:

It was another dismal day for Class III milk futures as the block cheese price moved to a six-year low. The October contract fell below $15.00. The September futures contracts ceased trading, with the Federal Order class prices to be announced on Wednesday.

MILK:

Class III milk futures were under significant pressure again today in response to the decline in the block cheese price. The dry whey price is minimizing the weakness as it continues to increase, moving to the highest level since February 22, 2022. The low milk prices are beginning to have more impact as the calf prices are not making up for the decline in milk income. This may increase culling primarily on small dairy farms initially before triggering increased culling on large dairy farms. Class IV futures were strong as traders focused on the strength in nonfat dry milk rather than the weakness in butter. The spread between Class III and Class IB futures continues to widen. The September Federal Order class prices will be released on Wednesday. The trade anticipates a Class III price of $16.01 and a Class IV price of $19.08.

AVERAGE CLASS III PRICES:

3 Month:	$15.26
6 Month:	$15.84
9 Month:	$16.24
12 Month:	$16.55

CHEESE:

The block cheese price fell to the lowest level since May 5, 2020. The expansion of milk production, as cows continued to be added, is providing plentiful milk for manufacturing. The low prices have not yet increased demand sufficiently to tighten supply. Buyers are complacent, seeing no reason to purchase aggressively, which could result in building supply at a time when they do not need to.

BUTTER:

The butter price continues to struggle as butter production increases due to increased cream supplies. Inventory in August declined seasonally, but the decline was less than usual. This has resulted in butter in cold storage being 10% above a year ago.

OUTSIDE MARKETS SUMMARY:

December corn closed down 1.00 cent per bushel at $5.2200, November soybeans closed up 9.50 cents at $12.9775, and December soybean meal closed down $.40 per ton at $359.00. December Chicago wheat closed up 4.00 cents at $6.9275. December live cattle closed unchanged. November crude oil is down $3.66 per barrel at $88.94. The Dow Jones Industrial Average is down 132 points at 51,350, with the NASDAQ down 23 points at 26,798.