MILK:
The divergence of cheese prices Monday basically canceled each other out, leaving the underlying price calculation about unchanged. There was little price direction for traders, leaving them resigned to hopefully scalp the market for some profit. The large decline of grain prices was due to a better 8- to 14-day forecast and some senators putting pressure on President Joe Biden to ease the fuel blending mandates. Surging renewable fuel prices moved to record levels with oil companies pushing senators to recommend relaxing the blending mandate. There is no indication this will be done, but traders are not waiting around to see whether it is before liquidating positions. It is doubtful President Biden would do this due to his aggressive "green" stance; but if he does, he might as well throw all of his green ideas out of the window. But money talks and oil companies have a lot of clout. Lower grain prices would be very beneficial to dairy operations, reducing the high cost of feed. A lower cost of feed will keep milk production strong, thereby possibly reducing the upside price potential of milk. There is a lot of growing season remaining and a lot of price volatility will take place. The corn crop condition declined 4% in the good/excellent category with conditions now at 68% good to excellent. This compares to 71% a year ago. The soybean crop condition remained unchanged with 74% of the crop in good/excellent condition compared to 48% a year ago.
AVERAGE CLASS III PRICES:
3 Month: | $17.69 |
6 Month: | $18.25 |
9 Month: | $18.23 |
12 Month: | $18.16 |
CHEESE:
Cheese prices seem to be content to chop around. Buyers and sellers are doing business as they need to with buyers generally purchasing on an as-needed basis. They have been able to pick up supply for inventory without difficulty as sellers continue to move supply to the market rather than hold and speculate over prices increasing at some point. Cheese output is strong as most milk from school accounts is moving to manufacturing. There does not appear to be any change in the near future.
BUTTER:
Churning remains active, but not at the levels it had been. Cream is available to meet demand. Some butter plants are selling some extra cream rather than churn and build too much inventory. Demand is strong from the food service industry but has slowed a bit for retail. Price is expected to remain sideways.
OUTSIDE MARKETS SUMMARY:
July corn fell 25.25 cents, closing at $6.5925. July soybeans fell 36.25 cents, closing at $14.7225 with July soybean meal down 9.40 per ton, closing at $373.90. July wheat declined 6.25 cents, ending at $6.7450. June live cattle gained $0.67, ending at $119.37. July crude oil slipped $0.03, closing at $70.88 per barrel. The DOW declined 86 points, closing at 34,394 while the NASDAQ gained 105 points, closing at 14,174.