MILK
Class III milk futures posted double-digit gains in September through November contracts. Although the bump was nice, traders will remain cautious, questioning the duration of the increase. Overall market fundamentals have not changed over the past few weeks other than the fact that less milk is moving to manufacturing due to the increase of demand from bottlers for the school systems. This is not likely to tighten cheese or other dairy product supplies, but will at least limit growth of inventory, maybe. That will depend on the level of demand that will be seen throughout the rest of the year. There is not much left of the summer that will affect milk production with hot weather. However, it does seem that cows did well throughout the summer, for the most part, with production in July up 2.0% over July last year even though some states reported the hottest weather on record for the month. We could see some very strong milk production through the rest of the year. Feed will be an issue in some places with substantially higher prices due to the drought. Corn crop conditions declined 2 percentage points in the good-to-excellent category, slipping to 60%. This compares to 64% a year ago. Soybeans declined 1 percentage point to 56% good/excellent compared to 69% a year ago.
Average Class III Prices
| 3 Month: | $16.93 |
| 6 Month: | $17.17 |
| 9 Month: | $17.24 |
| 12 Month: | $17.29 |
CHEESE
Cheese inventory increased in the month of July. This was really not a good sign due to the fact that it decreased during the month of June. American cheese inventory increased 8.6 million pounds or 1%, totaling 818.2 million pounds. This is 4% higher than a year ago and the highest July inventory since 2018. Swiss cheese inventory increased 110.000 pounds to a total of 22.7 million pounds and is 11% above a year ago. Other cheese inventory gained 5.6 million pounds, totaling 608.5 million pounds. This is 4% above a year ago and the highest for the month of July. Total cheese increased 14.3 million pounds from June, reaching 1.449 billion pounds and 4% higher than last year. This is the highest July inventory on record.
BUTTER
Butter inventory in July totaled 397.4 million pounds. This was a decline of 17.2 million pounds or 4% below June. Inventory remains 7% above a year ago but made some nice progress as the June report showed inventory 14% above the previous year. Stocks are at the highest level for July since 1993.
OUTSIDE MARKETS SUMMARY
September corn slipped 0.75 cent, closing at $5.38. September soybeans gained 0.25 cent, ending at $12.94, with September soybean meal down $6.70 per ton, closing at $346.60. September wheat gained 5.50 cents, ending at $7.1975. August live cattle jumped $2.17, closing at $126.45. September crude oil jumped $3.50, closing at $65.64 per barrel. The Dow gained 216 points, ending at 35,336, while the NASDAQ gained 228 points, closing at 14,943.
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