MILK:
Class III milk futures were on a roller coaster Monday. Early strength turned into negative trade during spot trading, only to come back to some extent into the close. The question is going to be whether the decline of blocks will be short lived. Class III futures are just having a difficult time moving above and holding above $18. More milk is moving to deficit areas to fill school pipelines as usual during this time of year. Milk production is higher than last year and expected to continue that way throughout the rest of the year. Demand will need to improve on a greater scale than last year to see much higher prices. Last year, the Farm to Families Food Box program helped increase demand and milk prices. That is not available this year, leaving demand up to some increased demand for food programs, but more to regular demand from consumers. Corn crop conditions declined 2% last week with good/excellent at 63%. The good/excellent conditions for soybeans declined 3% to the level of 57%.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.63 |
| 6 Month: | $17.12 |
| 9 Month: | $17.23 |
| 12 Month: | $17.30 |
CHEESE:
The decline of blocks Monday was the first decline since July 21, which increases trader's anxiety in the market. The first reaction is that price resistance may have been reached. This may result in buyers stepping back Tuesday to see just how aggressive sellers might become. Cheese production has been filling demand, but inventory has not been building recently and should begin to decline seasonally. The rate of that decline will dictate prices.
BUTTER:
Price continues to chop, while at the same time moving in a down-trending channel. Inventory remains substantially higher than a year ago and will be able to supplement higher levels of demand without any concern over tightening supplies. Butter is not expected to move much in the near future.
OUTSIDE MARKETS SUMMARY:
September corn declined 3.50 cents, closing at $5.6475. September soybeans gained 3 cents, ending at $13.76 with September soybean meal up $1.80, closing at $359.40 per ton. September wheat slipped 1.75 cents, closing at $7.6050. August live cattle gained $0.77, closing at $123.52. The DOW gained 110 points, ending at 35,625 while the NASDAQ declined 29 points, closing at 14,794.
