MILK
Milk production continues to remain strong with output continuing to exceed the level of last year despite having some bouts of very hot weather and areas experiencing continued drought. Spot milk price discounts continue to remain from $4 to $6 under class. Feed prices have become a bit less expensive recently after there were some rain events that moved across some of the dry areas of the Upper Midwest and Plains. The crop is a long way from harvest and remains at risk through pollination and the need for continued moisture. USDA will release its World Agricultural Supply and Demand report Monday, which may have a significant impact on grain futures. The report will also provide estimates for milk production for this year and next year as well as estimates for milk prices and product prices for this year and next year as well. USDA is expected to raise the level of expected milk production due to increasing cow numbers and production per cow.
AVERAGE CLASS III PRICES
| 3 Month: | $17.37 |
| 6 Month: | $17.80 |
| 9 Month: | $17.77 |
| 12 Month: | $17.76 |
CHEESE
Block cheese price has moved to the highest level it has been since May 14. Price has increased 26.75 cents since the low was set one month ago. Unfortunately, Class III milk futures have not been able to reflect the full impact of this gain due to the weakness of dry whey. During the same period, dry whey price has declined 11.25 cents, which has kept a lid on futures prices. For the week, blocks jumped 17 cents with barrels gaining 8 cents. Dry whey declined 4.25 cents.
BUTTER
For the week, butter declined 6.50 cents while Grade A nonfat dry milk slipped 0.75 cent. This put pressure on Class IV futures with contracts closing significantly lower. This week, there has been information coming from butter manufacturers that the cream market is beginning to tighten. This is later than usual but running somewhat seasonally. It is possible that a tighter supply and higher prices might result in lower production of butter as some plants may decide to sell some cream to take advantage of higher prices if and when they develop. For now, there is sufficient supply to satisfy manufacturing needs.
OUTSIDE MARKETS SUMMARY
July corn declined 8.25 cents, closing at $6.2975. July soybeans jumped 13.75, closing at $14.04, with July soybean meal down $2.80 per ton, closing at $352.50. July wheat declined 3.75 cents, ending at $6.0850. August live cattle slipped $0.05, closing at $119.22. August crude oil jumped $1.62, closing at $74.56 per barrel. The Dow jumped 448 points, ending at 34,870, while the NASDAQ gained 142 points, closing at 14,702.
