Monday Midday Dairy Market Summary - Cheese and Butter Find Continued Support

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	20 Higher
SOYBEAN MEAL:	$3.20 Higher
LIVE CATTLE:	$2.07 Higher
DOW JONES:	130 Points Lower
NASDAQ:	157 Points Higher
CRUDE OIL:	$0.34 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent to close at $1.63 with 5 loads traded. The barrel cheese price increased 1.50 cents to close at $1.6275 with no loads traded. The dry whey price remained unchanged at 69.50 cents with no loads traded. Class III futures are unchanged to 48 cents lower. Futures are lower due to a round of profit-taking, putting sufficient pressure on the market and triggering further liquidation. The butter price decreased 1.75 cents to close at $1.5725 with 9 loads traded. Grade A nonfat dry milk decreased 2.00 cents to close at $1.4500 with 3 loads traded. Class IV futures have traded from 42-47 cents lower. Butter futures are 0.50 -- 4.20 cents lower. Dry whey futures are 0.42 -- 1.10 cents lower. Cheese futures are steady to 4.50 cents lower. Nonfat dry milk fugtures are 0.10 -- 2.25 cents lower.

Monday Morning Dairy Market Update - Traders Wait For Spot Trading

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	6 to 7 Higher
Soybean Futures:	15 to 17 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	1 to 2 Higher

MILK:

There may not be much movement in milk futures before spot trading. The attitude has turned more bullish for milk futures due to the strength in cheese prices, but traders will remain cautious as milk production continues to outpace last year. There has been some impact on milk output due to the hot weather, but with the forecast showing temperatures moderating, there will be somewhat of a rebound in production. Milk supplies have been sufficient for demand and that is expected to continue. Cattle prices have been decreasing and may result in lower prices received for calves. However, that is expected to be temporary. Calf sales will continue to be a large part of income for the dairy operation. A significant increase in culling is not expected to surface anytime soon.

CHEESE:

The uncertainty of continued strength in cheese prices may keep traders cautious. Support has been evident in the market as buyers have been more aggressive in purchasing cheese to prepare for later demand. The block price may reach back to the levels of early May, but may have difficulty moving higher based on current market fundamentals.

BUTTER:

The price remains in a sideways range, but is expected to increase in August or September as buyers build inventory to prepare for fall and holiday demand. The current inventory remains below a year ago and export interest remains strong. This may provide support in time as buyers step up to take advantage of the low price.

Friday Closing Dairy Market Update - May Fluid Milk Sales Decreased 2.1%

GENERAL OVERVIEW:

Milk futures closed mixed. The increase in cheese prices resulted in the nearby months closing with double-digit gains except for July. The rest of Class III and IV futures were mixed. Trade volume was large in the August and September contracts. Fluid milk sales in May were 2.1% below a year ago.

MILK:

Class III milk futures posted a strong week in the nearby contract with September, October, and November contracts closing above $18.00, where they had not been since May 21st. Strength in cheese prices supported the gains. Futures may have limited upside from here unless buyers continue to purchase cheese aggressively next week. Class IV futures struggled, unable to find support from butter and nonfat dry milk. Milk sales in May were 2.1% below a year ago. Whole milk sales increased 0.1%; flavored whole milk increased 11.0%; reduced fat milk decreased 5.4%; low fat milk decreased 9.7%; fat-free skim milk decreased 11.3%; flavored fat-reduced milk decreased 8.2%; buttermilk declined 2.0%, and other fluid milk product sales increased 24.1%. Organic whole milk sales increased 2.0%; organic flavored whole milk increased 1.9%; organic reduced fat milk decreased 2.0%; organic low-fat milk decreased 8.0%; organic fat-free milk decreased 13.4%; organic flavored fat-reduced milk decreased 16.1%; and other organic fluid milk product sales decreased 100.0%.

AVERAGE CLASS III PRICES:

3 Month:	$17.20
6 Month:	$17.59
9 Month:	$17.55
12 Month:	$17.54

CHEESE:

For the week, block increased 8.00 cents with 27 loads traded. The weekly average price is $1.6055 compared to $1.5150 last week. Barrels increased 5.25 cents with 7 loads traded. The weekly average price is $1.5950 compared to $1.5270 last week. Dry whey increased 0.50 cent with 3 loads traded. The weekly average price is 69.40 cents compared to 67.90 cents last week. The block price moved to the highest level since May 13th. Barrels moved to the highest level since May 6th.

BUTTER:

For the week, butter decreased 6.00 cents with 57 loads traded. The weekly average price is $1.6085 compared to $1.6500 last week. Grade A nonfat dry milk decreased 8.50 cents with 37 loads traded. The weekly average price is $1.5045 compared to $1.5160 last week.

OUTSIDE MARKETS SUMMARY:

December corn closed up 3.50 cents per bushel at $4.6750, November soybeans closed up 8.00 cents at $12.0300, and December soybean meal closed down $3.90 per ton at $318.50. September Chicago wheat closed up 8.00 cents at $6.8275. August live cattle closed down $2.65 at $224.43. August crude oil is up $3.54 per barrel at $82.49. The Dow Jones Industrial Average is down 407 points at 52,146, with the NASDAQ down 362 points at 25,520.