MILK
Class III milk futures managed a mixed close. Futures remained under pressure even after blocks increased and barrels bounced back from their lows. Eventually, futures trimmed some of the losses, but that does not mean that traders are turning a bit more friendly to the market. There may have been some feeling that the market is not as bearish as is being portrayed. Cooler weather will be moving into some areas as the week progresses, which should be conducive to better cow comfort. However, cooler weather is not to help crops grow in those areas that continue to lack rainfall. The trade seems to believe the good growing weather in the Eastern Corn Belt and much of the Western Corn Belt is going to make up for the losses in other areas of the country. Yet, grain prices will still be much higher than they were a year ago, but maybe not as high as feared earlier. The biannual cattle inventory report showed dairy cattle inventory as of July 1 at 9.50 million head. This is the highest inventory of dairy cattle on the biannual report since July 1995. Replacement heifers totaled 4.10 million head, up 1,000 head from July 2020. The percentage of heifer to milk cows is 43.2% compared to 42.8% in July 2020.
AVERAGE CLASS III PRICES
| 3 Month: | $16.60 |
| 6 Month: | $17.07 |
| 9 Month: | $17.18 |
| 12 Month: | $17.26 |
CHEESE
Cheese prices may be in a precarious position. Traders have become very cautious over buying into the market due to a pattern of short-term price rallies since the beginning of the year. Price increases have been difficult to maintain due to strong cheese production and readily available supplies. Recently, there have been some reports that cheese supplies may be tightening is some areas, primarily for barrels. This does not seem to be widespread. If this is the case, the market shows little concern over it at present.
BUTTER
Price is struggling in part due to the recent inventory report showing stocks 14% above a year ago. Demand will need to be greater than it currently is to work down stocks by the end of the year. Current butter production remains strong with cream supplies tighter but remaining plentiful.
OUTSIDE MARKETS SUMMARY
September corn declined a penny closing at $5.4875. August soybeans gained 5.50 cents, closing at $14.1825, with August soybean meal up $5.20 per ton, closing at $358.80. September wheat declined 2.50 cents, ending at $6.7450. August live cattle declined $0.52, closing at $122.92. September crude oil declined $0.26, closing at $71.65 per barrel. The Dow declined 86 points, closing at 35,059, while the NASDAQ fell 180 points, closing at 14,661.
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