MILK:
Class III milk futures just could not find any support even though cheese prices increased Monday. The feeling of traders is that cheese prices may increase for a short period of time before falling back again. That has been the pattern since the beginning of the year. Traders thought that pattern had been broken about three weeks ago when cheese prices moved higher for over the period of a week. However, cheese prices came crashing down. Now the increase of cheese over the past three days is being met with skepticism. As long as milk production remains strong and cheese plants continue to run at or near capacity, prices may have limited upside potential. Class IV futures took a beating aw well today due to the decline of butter price. This decline moved butter price down to the lowest level is has been since March 22. This does not paint a very good picture for Class IV milk prices.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.63 |
| 6 Month: | $17.12 |
| 9 Month: | $17.23 |
| 12 Month: | $17.30 |
CHEESE:
Buying interest in cheese has been able to move prices higher again. Buyers are looking ahead to upcoming demand and are taking advantage of these prices. The extent of their willingness to purchase is anyone's guess. Traders may not be too excited about getting into the market on the long side this time due to what happened the last time prices increased. Demand is good, but it does appear to be good enough to provide any indication of the potential for tighter cheese supply.
BUTTER:
Price broke through support at the previous low from July 9 and also the low from March 22. This put price at the lowest level since March 1. The trend remains down with no indication of a change in that trend. With inventory remaining 14% a year ago, there is little hope of a sustained price rally to take the market back up to $1.90. Churns remain active with sufficient cream available for butter production.
OUTSIDE MARKETS SUMMARY:
September corn 2.50 cents, closing at6 $5.4975. August soybeans gained 11.75 cents, ending at $14.1275, with August soybean meal unchanged at $353.60 per ton. September wheat declined 7 cents, closing at $6.77. August live cattle jumped $1.95, ending at $123.45. September crude oil declined $0.16, closing at $71.91 per barrel. The Dow gained 83 points, closing at 35,144, while the NASDAQ gained 4 points, closing at 14,841 points.
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