MILK
Milk futures closed under pressure. Class III did not fall because of cheese prices, as cheese prices increased. The pressure came from further weakness of dry whey pushing price down to the lowest level since Jan. 26. Class IV futures did not fall because of pressure from butter, as price remained unchanged. The pressure came from a decline of nonfat dry milk. So, what should have been supportive to the market was offset by the other categories of the spot market. The market just cannot seem to catch a break in which all categories trend higher. Some concern stemmed from the Global Dairy Trade auction Tuesday. The trade-weighted average declined 3.6% and was the sixth consecutive event which posted a decrease with this one being the largest. Anhydrous milk fat declined 0.9% to $5,632 per metric ton or $2.55 per pound. Butter declined 3.2% to $4,458 per metric ton or $2.02 per pound. Buttermilk powder fell 9.8% to $3,298 per metric ton or $1.50 per pound. Cheddar cheese fell 9.2% to $3,949 per metric ton or $1.79 per pound. Lactose remained unchanged at $1,238 per metric ton or $0.56 per pound. Skim milk powder declined 7.0% to $3,126 per metric ton or $1.42 per pound. Whole milk powder declined 3.0% to $3,864 per metric ton or $1.75 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $16.82 |
| 6 Month: | $17.40 |
| 9 Month: | $17.49 |
| 12 Month: | $17.55 |
CHEESE
Cheese prices bumped up nicely with blocks posting a nice gain, bringing price back to the highest level since May 18. Traders remain cautious as to just how far prices will be able to increase before they will set back again. It is the time of year during which buyers generally do become more aggressive, but the amount of cheese that has been available to the market has been able to satisfy demand without difficulty. That may come to an end if demand remains strong and buyers look ahead to second-half demand. There is no reason prices could not return to the levels they were in spring.
BUTTER
Price is holding, but Grade A nonfat dry milk price seems to be trying to pull it down. The weakness of nonfat dry milk is having a negative impact on Class IV futures with contracts posting double-digit losses with September falling 46 cents. Retail demand for butter has slowed now that the holiday is over, and stores are not featuring butter as they did prior to the holiday.
OUTSIDE MARKETS SUMMARY
July corn fell 41.25 cents, closing at $6.56. July soybeans fell 88 cents, closing at $13.6375, with July soybean meal down $24.90 per ton, closing at $355. July wheat fell 25.75 cents, ending at $6.20. August live cattle gained $0.40, ending at $122.40. August crude oil fell $1.79, closing at $73.37 per barrel. The Dow fell 209 points, ending at 34,577, while the NASDAQ gained 24 points, ending at 14,664.
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