MILK
Class III milk futures moved higher during the week only to fall back near where they were at the end of last week. Traders' hopes of a market beginning to trend higher were dashed when barrels slipped back down again. This is interesting since cheese prices actually closed higher for the week. One would have thought the increase of cheese would have kept prices higher than they were a week ago. However, some pressure stemmed from the decline of the dry whey price. Trader psychology will need to be turned in order to resurrect some sort of bullishness. A market that begins trending higher consistently will be needed, and that may be a tall order for the foreseeable future. But anything is possible now that we are in the second half of the year and it is a time when buyers generally become more aggressive as they look ahead to upcoming demand and begin preparing for it. The only drawback is that they have been able to purchase significant volumes of dairy products due to manufacturers desiring to move product to the market as quickly as possible rather than hold onto it with the hope of stronger prices down the road. Buyers may already have the ownership of sufficient volumes of product, leaving them less aggressive later this year. Markets will be close on Monday for an extended July Fourth holiday.
AVERAGE CLASS III PRICES
| 3 Month: | $16.93 |
| 6 Month: | $17.52 |
| 9 Month: | $17.58 |
| 12 Month: | $17.62 |
CHEESE
American cheese production totaled 473 million pounds, up 7.2% from May 2020, according to the May Dairy Products report released Friday. The comparisons will be skewed due to the disruption in production a year ago due to COVID. So, the main thing we can look at is the overall level of production, and that level was strong. Italian-type cheese production totaled 481 million pounds, down 0.2% from a year ago. Total cheese output reached 1.16 billion pounds, up 5.0% above May 2020. Dry whey production totaled 77.7 million pounds, down 7.6%. For the week, block cheese price increased 6.50 cents with only two loads traded. Barrels increased a penny with 17 loads traded. Dry whey price declined 2.25 cents with three loads traded.
BUTTER
Butter production totaled 185 million pounds, an increase of 7.6% over May 2020. Nonfat dry milk production totaled 205 million, up 30.6% over a year ago. Skim milk powder production totaled 35.7 million pounds, down 37.0% from a year ago. For the week, butter price increased 2.25 cents with 26 loads traded. Grade A nonfat dry milk declined 0.75 cent.
OUTSIDE MARKETS SUMMARY
July corn fell 22.50 cents, ending at $6.9725. July soybean closed 5 cents higher at $14.5175 with July soybean meal down $1.90, closing at $379.90 per ton. July wheat fell 12.75 cents, closing at $6.4575. August live cattle fell $1.57, ending at $122.00. August crude oil slipped 7 cents, closing at $75.16 per barrel. The Dow gained 153 points to 34,786, while the NASDAQ gained 117 points to 14,639.
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