Thursday Morning Dairy Market Update - Weakness May Prevail

OPENING CALLS:

Class III Milk Futures:	2 to 5 Lower
Class IV Milk Futures:	10 to 15 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	1 to 3 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	4 to 5 Lower

MILK:

Milk futures have little support with the weakness in the underlying cash. The bounce in the cheese price did not garner much buying interest from traders are it is expected to be short-lived. Milk output is not slowing down and it will not as long as the weather remains good for cow comfort. The April Milk Production report will be released on Friday, indicating the strength of production and the number of cows in the dairy herd. USDA will release the April Livestock Slaughter report Thursday afternoon. The report provides the level of dairy cattle slaughter for the month.

CHEESE:

The bounce in the block cheese price on Wednesday is expected to be short-lived, as there is little reason for buyers to step up and purchase cheese aggressively. Cheese production is increasing as more milk is moving to manufacturing.

BUTTER:

The butter market is dealing with plentiful supplies as churns operate seven days a week. It is not a matter of inventory building substantially, as it remains below a year ago, but manufacturers want to move supplies to the market as quickly as possible and are willing to offer them at lower prices. As long as selling remains aggressive, buyers will hold for lower prices. 

Wednesday Closing Dairy Market Update - June Advanced Class I Price is $22.80

GENERAL OVERVIEW:

Class IV futures took a beating from the decrease in butter and nonfat dry milk prices. Class III futures also showed mostly lower prices despite the increase in block cheese. The June Class I price is $22.88.

MILK:

The recent slight bullishness that developed in the milk market has quickly turned bearish. Greater concern is developing over the price potential of the market. The weakness in the butter and nonfat dry milk market is especially concerning, with churns running seven days a week due to plentiful cream supplies. There is sufficient supply for the market that buyers do not have to step up to the plate to purchase. Loads continue to be traded in the spot market, and that is keeping the market from going higher. Nonfat dry milk has reached its peak. Based on what the price pattern has been in the last week, especially today's large decline in the nonfat dry milk spot market, we can safely say this is going to put more pressure on Class IV futures. Class IV futures have been enjoying a significant premium relative to Class III because it was being supported by nonfat dry milk. Now that nonfat dry milk is seeing weakness and is trending lower, a lot of that support is going to be taken out of that market. Historically, the market that moves up significantly over a period of time, once it tops out, has a long tail. We could actually see the Grade A nonfat dry milk market decline for a long period of time as we move forward. The June advanced Class 1 price was released at $22.18. This was $2.03 above May and is $4.92 higher than June 2025.

AVERAGE CLASS III PRICES:

3 Month:	$16.93
6 Month:	$17.59
9 Month:	$17.78
12 Month:	$17.75

CHEESE:

Cheese production is running higher than a year ago, keeping a sufficient supply available to the market despite increased demand. Spot milk prices in the Central region range from $6.00 under class to $1.00 over class. The bounce of the block cheese spot price today may be short-lived.

BUTTER:

The spot butter price fell to the lowest level since January 29th. Buyers continue to see plentiful supplies, making it easy to purchase supplies at lower prices. There is no indication as to the level of support for butter.

OUTSIDE MARKETS SUMMARY:

July corn closed down 9.50 cents per bushel at $4.6575, July soybeans closed down 9.75 cents at $11.9975, and July soybean meal closed down $1.40 per ton at $330.90. July Chicago wheat closed down 6.75 cents at $6.6050. August live cattle closed down $1.95 at $245.30. July crude oil is down $5.89 per barrel at $98.26. The Dow Jones Industrial Average is up 543 points at 49,907, with the NASDAQ up 400 points at 26,270.

Wednesday Morning Dairy Market Update - Cash Uncertainty to Dominate Trade

OPENING CALLS:

Class III Milk Futures:	2 to 5 Lower
Class IV Milk Futures:	4 t o 8 Lower
Butter Futures:	Steady to 1 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	3 to 5 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	1 to 2 Higher

MILK:

The pressure on milk futures Tuesday will keep traders cautious ahead of spot trading Wednesday. Futures prices continue to roll down in Class III contracts as the underlying cash prices provide little reason for traders to be bullish. Strong milk output and the expectations for it to continue leave limited expectations for higher prices. It will be up to the impact of the weather this summer on milk output, potentially tightening the milk supply. However, with increasing cow numbers lower production per cow may still keep milk production higher than a year ago. However, advancements have been made to limit the impact of hot weather on cow comfort.

CHEESE:

The block price falling below the trading range may keep buyers unaggressive with the anticipation of cheese continuing to be offered on the market. They see no need to be aggressive, as a sufficient supply will be available as long as milk production remains strong. Currently, it seems that it would take a black swan event to change the market.

BUTTER:

The decline in butter on Tuesday renewed the possibility of the price revisiting the previous low. The weakness over the past week in nonfat dry milk is concerning, as the price may have reached resistance, and demand has been impacted. If this weakness continues, Class IV futures will trend lower.