MILK
There were new lows again in September through December Class III futures contracts. Milk futures are unable to find a bottom as long as cheese prices are under pressure and as long as traders remain bearish. There does not seem to be anything that will slow milk production down. Earlier, there was a lot of anticipation for high feed prices as the result of the drought. There is still hope that rains will fall in dry area, allowing for more growth to crops to at least limit some of the losses. Some crops are probably lost and rain may not make any difference. So far, farmers are determined to keep barns full and production as high as possible, especially in light of lowering milk prices. Tuesday is the last trading day for July futures and options with the Federal Order class prices to be announced on Wednesday. The August and September Class III contracts are on the verge of falling below $16.00. Class IV futures for August through October have already been below $16.00.
AVERAGE CLASS III PRICES
| 3 Month: | $16.24 |
| 6 Month: | $16.69 |
| 9 Month: | $16.86 |
| 12 Month: | $16.98 |
CHEESE
Block cheese has been holding well, indicating the market may be balanced. The concern is that buyers are not becoming aggressive even though price is reasonable heading closer through the second half of the year. Buyers are comfortable at the current price level as supply is readily available for demand. Traders are becoming increasingly cautious as the block/barrels spread continues to widen.
BUTTER
Butter manufacturers are receiving adequate amounts of cream to keep plants busy and production at desired levels. Demand is termed as seasonal and level. Both retail and food service industry sales are steady and running along seasonal lines. Exports have been very good, but not good enough to tighten supply. It is unlikely price will trend higher anytime soon and will have a difficult time reaching back to $1.90 where it was in early April.
OUTSIDE MARKETS SUMMARY
September corn gained 11.75 cents, closing at $5.5875. August soybeans gained 4 cents, ending at $14.1875, with August soybean meal up $4.60 per ton, closing at $357.20. September wheat jumped 25.75 cents, closing at $7.2950. August live cattle gained $0.05, closing at $122.12. September crude oil fell $2.69, closing at $71.26 per barrel. The Dow declined 97 points, closing at 34,838, while the NASDAQ gained 8 points, ending at 14,681
