Friday Midday Dairy Market Summary - Nonfat Dry Milk Holds Steady

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	3 Higher
SOYBEAN MEAL:	$1.50 Lower
LIVE CATTLE:	$0.22 Lower
DOW JONES:	418 Points Higher
NASDAQ:	147 Points Higher
CRUDE OIL:	$2.31 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 2.00 cents to close at $1.3075 with three loads traded. There were seven unfilled bids and no uncovered offers remaining at the close of spot trading. The barrel cheese price remained unchanged at $1.4525 with no loads traded. The dry whey price remained unchanged at 80.50 cents with no loads traded. Class III futures are 10 cents lower to 8 cents higher. The butter price increased 4.25 cents to close at $1.40 with 21 loads traded. There were 14 unfilled bids and 53 uncovered offers remaining, indicating the upside price potential will be limited. Grade A nonfat dry milk remained unchanged at $2.1700 with no loads traded. Class IV futures are mixed, ranging from 3 cents lower to 18 cents higher. Butter futures are 5.47 cents lower to 3.50 cents higher. The weaknes is taking place in the second half of 2027 contracts. Dry whey futures are 1.00 to 1.35 cents higher. Cheese futures are 1.10 cents lower to 0.80 cent higher. Nonfat dry milk futures are 0.20 to 1.25 cents higher. The August Cold Storage report will be released today.

Friday Morning Dairy Market Update - Butter and Cheese Buyers Remain Complacent

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	9 to 10 Lower
Soybean Futures:	11 to 12 Lower
Soybean Meal Futures:	$3 to $4 Lower
Wheat Futures:	14 to 16 Lower

MILK:

Fortunately, dry whey prices are strong; otherwise, Class III prices would be significantly lower. The price is at the highest level since February 23, 2022. The nonfat dry milk price is at the highest level since June, but continues to provide substantial support to Class IV futures. The milk supply is sufficient for demand, but not burdensome. Spot milk prices are flat, close to $2.00 above. The August Milk Production report showed milk production will continue to remain higher than a year ago, making it difficult for milk prices to increase unless demand improves and exceeds a year ago.

CHEESE:

The block cheese price may revisit the low of the year before buyers may turn more aggressive to take advantage of the low price. The price is only 4.50 cents above the low of Jan. 12. Blocks have been in a freefall since mid-August. The August Cold Storage report will be released this afternoon. I think the report will show a decrease in inventory from a year ago, but the decrease may be less than usual, resulting in inventory remaining above a year ago.

BUTTER:

Butter may follow the same pattern as block cheese and may revisit the low of the year before support may be found. The current price is 5.675 cents above the low. Retail butter demand is variable, with food service demand showing gains.

Thursday Closing Dairy Market Update - August Cattle Slaughter Was Higher Than a Year Ago

GENERAL OVERVIEW:

Class III futures closed mostly lower, while Class IV futures were mostly higher. This followed the direction of the underlying cash. Dairy cattle slaughter in August was lower than July, but higher than August 2025.

MILK:

Trading activity was moderate today despite limited volatility. Class III futures continue to erode, with new contract lows again in the October and November contracts. These contracts continue to move deeper into the $15.00 range. Some of the October contract is priced, but it still has about three weeks left to price. There could be further price erosion. Class IV futures continue to find support from the nonfat dry milk prices. The spread between October Class III and Class IV contracts is $5.01. The August Livestock Slaughter report was released today. Dairy cattle slaughter in August totaled 221,100 head. This was 6,500 less than July but up 3,700 head from August 2025. Historically, dairy cattle slaughter increases in August compared to July. This year followed the same pattern as last year when slaughter decreased. USDA will release the August Cold Storage report on Friday.

AVERAGE CLASS III PRICES:

3 Month:	$15.75
6 Month:	$16.08
9 Month:	$16.41
12 Month:	$16.65

CHEESE:

The concerning news is that bulk cheese demand in the Northeastern region is termed as weak. Some bulk cheese is being sold below the price levels seen in the CME. That does not bode well for the strength of prices throughout the rest of the year. Demand in the Central region is termed as steady. Demand in the Western region is reported as strong. However, with spot loads of cheese readily available, there is little reason for buyers to be aggressive.

BUTTER:

Cream supplies are steady with sufficient supply available for churning. Cream supply is expected to increase over time as butterfat improves in milk and ice cream production winds down. Some plants have increased schedules to six-day weeks as they prepare for holiday demand. The concern is that the price may not see much strength as buyers have been able to purchase substantial butter supplies without having to bid higher.

OUTSIDE MARKETS SUMMARY:

December corn closed down 1.50 cents per bushel at $5.2750, November soybeans closed down 0.50 cent at $13.1750, and December soybean meal closed up $1.80 per ton at $372.40. December Chicago wheat closed down 1.50 cents at $7.0700. December live cattle closed down $1.25 at $221.10. November crude oil is up $2.45 per barrel at $94.61. The Dow Jones Industrial Average is down 162 points at 51,350, with the NASDAQ up 3 points at 26,939.