MILK
Milk output and supply is fairly level with last week in many areas of the country. More milk continues to move to manufacturing as bottling demand has slowed. The recent hot weather did not seem to affect milk receipts much at many plants. Dairy farms have made great strides in cooling facilities to keep cows comfortable, lessening the impact. Spot milk in the Midwest is reported at $4-$6 under class, which is unusual for this time of year. Spot milk prices are generally at or slightly above class during this time. This shows the level of production that continues to take place. USDA will release the May Milk Production report Friday afternoon. This is expected to show milk output higher than last year. I estimate milk production to show an increase of 2.4% over the previous year with cow numbers up 4,000 head from the previous month. Grain prices took a huge hit Thursday due to positive weather forecast. Corn closed down the daily limit of 40 cents. Soybeans plummeted $1.1875 and soybean meal fell $17. These are declines we have not seen in a long time. This is possible due to the CME increasing price limits for grain a few weeks ago. Miss some rains or not get sufficient coverage and prices will increase just as dramatically.
AVERAGE CLASS III PRICES
| 3 Month: | $17.18 |
| 6 Month: | $17.76 |
| 9 Month: | $17.89 |
| 12 Month: | $17.88 |
CHEESE
Even though there has been some hot weather recently, numerous manufacturing plants report that they continue to run at full capacity. Strong cheese output leaves buyers of cheese unaggressive as was seen Thursday during spot trading. Buyers see no tightness developing in the market anytime soon. At the same time, sellers continue to offer cheese to the spot market to minimize supply build. The recent weakness of barrels has been a surprise. Price is now down to the level it was on May 28. A move below this will put it back to a price last seen in April.
BUTTER
The market continues to hold steady. Supply of cream is readily available, keeping churns active. This allows for both international and domestic demand to be easily supplied. Butter inventory is reported to be building as plants want to make sure they have sufficient supply on hand for later demand. Retail demand has slowed with the increase in demand from the food service industry.
OUTSIDE MARKETS SUMMARY
July corn plummeted 40 cents, closing at $6.33. July soybeans plummeted $1.1875, closing at $13.2975, with July soybean meal falling $17.70 per ton, closing at $361.50. July wheat fell 23.75 cents, ending at $6.39. June live cattle fell $2.20, closing at $120.20. July crude oil declined $1.11, ending at $71.04 per barrel. The Dow lost 210 points, closing at 33,823, while the NASDAQ gained 122 points, ending at 14,161.
