Tuesday Midday Dairy Market Summary - Spot Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	7 Higher
SOYBEANS:	3 Higher
SOYBEAN MEAL:	$0.20 Lower
LIVE CATTLE:	$2.17 Higher
DOW JONES:	189 Points Lower
NASDAQ:	25 Points Lower
CRUDE OIL:	$3.48 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 4.00 cents to close at $1.5550 with 13 loads traded. The barrel cheese price declined 5.25 cents to close at $1.5775 with no loads traded. The dry whey price declined 2.50 cents to close at 65.50 cents with 4 loads traded. Class III futures are 27 cents lower to 1 cent higher with July showing the only gain. The butter price fell 9.00 cents to close at $1.3800 with 8 loads traded. There were 8 unfilled bids and 84 uncovered offers remaining at the close of spot trading. Surprisingly, the sellers want to move supplies at continually lower prices. The only bright spot was Grade A nonfat dry milk with a gain of 2.00 cents, with 2 loads traded. Class IV futures are 4-20 cents lower. Butter futures are 0.50 -- 7.50 cents lower. Dry whey futures are 0.05 -- 0.75 cent lower. Cheese futures are steady to 2.40 cents lower. Nonfat dry milk futures are 1.55 -- 2.60 cents higher.

Tuesday Morning Dairy Market Update - Further Weakness Expected

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$0.50 to $1 Lower
Wheat Futures:	5 to 7 Lower

MILK:

Overnight trading activity indicates further pressure may be put on milk futures ahead of spot trading. There is concern the block cheese prices will see further weakness as buyers hold back to see how aggressive sellers will be. Strong milk output is expected to continue keeping sufficient milk available for bottling and manufacturing. Expansions continue to take place and cow numbers are increasing. The recent weakness in calf prices may have little impact on the desire to increase cow numbers. The overall cattle market remains tight, and the recent weakness in beef prices is expected to be temporary. The U.S. border will be reopening for cattle imports from Mexico beginning in late August, but those imports will not overwhelm the market anytime soon. Expansion of dairy processing facilities continues as milk production is expected to trend higher.

CHEESE:

The block cheese price may see further weakness. Only sellers showed up during spot trading on Monday. Buyers may hold back to see how aggressive they will be. The supply of cheese is expected to remain readily available for demand as milk production remains strong.

BUTTER:

It is uncertain where the butter price will find support. The large amount of uncovered offers remaining at the close of spot trading on Monday suggests further weakness unless the sellers will not offer the supply at a lower price. If not, it would indicate the upside price potential is limited for the time being. 

Monday Closing Dairy Market Update - More Heifers Than a Year Ago

GENERAL OVERVIEW:

Milk futures closed lower again in response to the weakness of dry whey, butter, and block cheese. Class III futures are not far from eliminating all of the gains since July 6. Class IV futures have moved back to the levels last seen in January. The Cattle Inventory report showed more heifers.

MILK:

After the milk production report last week, there is no real reason for milk futures to remain higher or carry much extra premium. Milk production remains above a year ago with cow numbers increasing. The biannual Cattle Inventory report showed dairy cow numbers as of July 1 at 9.650 million head. This was 2% higher than July 2025. Replacement heifers totaled 3.600 million head, up 3% from July 2025. The percentage of replacement heifers to milk cows is 37.3&. This is historically low, but slightly higher than July 2025 and July 2023. Even though more cattle are bred with beef on dairy, sufficient heifers are being produced to maintain and grow the dairy herd. Cows are increasing in longevity as improved genetics and management practices are increasing productivity.

AVERAGE CLASS III PRICES:

3 Month:	$16.56
6 Month:	$17.03
9 Month:	$17.17
12 Month:	$17.28

CHEESE:

Buyers of cheese may hold back after immediate demand has been filled, milk production remains strong, and inventory remains stable. The concern that had developed due to the impact of hot weather seems to have been digested, and determined that milk supplies will not tighten. The concern is that cheese prices may follow the pattern of the last time prices were at these levels. Prices fell back significantly as buyers became less aggressive.

BUTTER:

The butter price has now bypassed the low of June 23rd and declined to the lowest level since January 22nd. Surprisingly, buyers have not increased their desire to build inventory at the low level. The cold storage report showed inventory in June was 7% below a year ago. Seasonal buying should increase at some point.

OUTSIDE MARKETS SUMMARY:

December corn closed down 13.50 cents per bushel at $4.7400, November soybeans closed down 39.75 cents at $12.1375 and December soybean meal closed down $11.10 per ton at $324.10. September Chicago wheat closed down 18.00 cents at $6.6000.

October live cattle closed down $3.73 at $218.78. September crude oil is down $7.49 per barrel at $81.82. The Dow Jones Industrial Average is up 263 points at 52,210, with the NASDAQ down 44 points at 24,932.