MILK:
Milk supply is plentiful for processing needs, which is being reflected in milk futures contracts. Milk futures are reacting to the weakness of cheese due to plants still running at full or nearly full capacity. This leaves buyers unaggressive in the spot markets. The demand from bottlers is relatively stable as usual for the summer in most areas while a few areas such as Florida are seeing a little uptick in demand for Class I milk. The Class I price for August was announced at $16.90, down $0.52 from July and down $2.88 from August 2020. USDA will be releasing a plethora of reports Thursday. They will released the June Milk Production, Cold Storage and Livestock Slaughter reports. I estimate milk production to be up 3.8% from a year ago. The production increase will be strong due to more dry cows last year during the month as cows were dried off earlier in order to reduce production on farms as plants urged production cuts. I estimate cow number to be up 2,000 head from last month.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.45 |
| 6 Month: | $17.04 |
| 9 Month: | $17.17 |
| 12 Month: | $17.26 |
CHEESE:
It is interesting that USDA's Dairy Market News reports that some cheese manufacturers suggest the current spot market does not seem to reflect demand and inventory levels in the Midwestern region. This indication is that demand for certain varieties is very strong. Barrel supply have been overcommitted in some cases with those plants telling customers that supply may be a bit tighter through the end of summer. However, the spot market is generally a good barometer for reflecting supply and demand. Thus, some of these reports may be location specific.
BUTTER:
Some plants are selling cream rather than churning in order to balance inventory. Overall, cream supply is readily available making the selling of cream a bit more challenging and not quite as lucrative as most other years at this time. The cold storage report is expected to show some increase of inventory, but the gain may be minimal.
OUTSIDE MARKETS SUMMARY:
September corn closed, unchanged at $5.7175. August soybeans declined 4.25 cents, ending at $14.3925, with August soybean meal up $4.30 per ton, closing at $369.80. September wheat gained 10.25 cents, ending at $7.1075. August live cattle gained $0.27, closing at $120.05. September crude oil jumped $3.10 per barrel, closing at $70.30. The Dow gained 286 points, closing at 34,798, while the NASDAQ gained 133 points, ending at 14,632.
