MILK
Class III futures were able to close higher for a change. Futures certainly were not explosive to the upside as underlying cash was mixed. But higher barrels did more than offset the decline of blocks, moving the overall price calculation a little higher. The increase of dry whey also helped to provide some support to futures. However, traders are not interested in piling on the bandwagon with the idea that milk prices will move higher unless there is further proof of higher demand or tighter supply. Bottling for school systems has slowed but will continue to some extent due to the offering of summer meals to children who qualify. USDA will release the World Agricultural Supply and Demand report on Thursday, which will provide their estimates for milk production, milk prices and product prices for this year and next year. The report is generally not a market mover but does provide information on trend. The other important aspect of that report will be the projection of grain supply and grain prices.
AVERAGE CLASS III PRICES
| 3 Month: | $17.66 |
| 6 Month: | $18.25 |
| 9 Month: | $18.20 |
| 12 Month: | $18.11 |
CHEESE
Cheese production continues to remain strong with the impact of the heat not yet reducing supply sufficiently to cause any tightness. Cheese demand is variable depending on location and variety. Spot milk in the Midwest continues to be available at a discount with some accepting extra loads of milk due to declining milk receipts while others are still not in the market to purchase anything extra. Block cheese still has not yet found a strong level of support. Barrel cheese is in good demand, but supply is not considered tight.
BUTTER
Sales to foodservice outlets are termed as steady as the pipeline has been refilled and is now being maintained. Retail orders have slowed. Cream is available, but some manufacturers have reduced production and have started selling some of their cream rather than churn it. They want to make enough butter for inventory and for meeting orders, but they do not want to overproduce.
OUTSIDE MARKETS SUMMARY
July corn gained 10.75 cents, closing at $6.9075. July soybeans fell 17.50 cents, closing at $15.6250, with July soybean meal down $3.40 per ton, closing at $386.40. July wheat declined 2.75 cents, closing at $6.8225. June live cattle gained $0.67, closing at $117.40. July crude oil slipped $0.09, ending at $69.96 per barrel. The Dow declined 153 points, closing at 34,447, while the NASDAQ declined 13 points, ending at 13,912.
