MILK
Milk futures did not follow the increase of underlying cash to the same degree. Futures were generally higher, but not to the extent one would have anticipated given the increase of cash prices. The reason is because of the bearish attitude currently being held by traders in the market. That attitude will be difficult to change under current market conditions. For quite some time, price increases have been temporary and met with selling pressure, which took prices back below the previous lows. Buyers have not needed to be aggressive, as there has not been any tightness of milk supply or dairy product supply. Overall, demand has remained strong and exports have been phenomenal, but supply has exceeded demand. This will change but will take some time to accomplish. Both Class III and Class IV futures were mostly higher at the close, but gains were limited. Corn crop conditions increased 2 percentage points with good-to-excellent conditions at 64%. Soybean crop conditions remained unchanged at 60% good to excellent.
AVERAGE CLASS III PRICES
| 3 Month: | $16.60 |
| 6 Month: | $17.10 |
| 9 Month: | $17.21 |
| 12 Month: | $17.29 |
CHEESE
It is encouraging to see spot cheese prices move higher, especially after blocks held a steady price for eight consecutive trading sessions. There was some fear blocks could drop lower due to the weakness of barrels, but so far, the action Monday is encouraging. However, plentiful supplies may limit buying interest, leaving the market with limited upside. Seasonally, cheese inventory should decrease from now through the end of the year as demand increases.
BUTTER
Price is nearing the top of the trend line, but that does not indicate any change in market attitude or market strength. Cream supply has been tightening to some extent, but there is sufficient supply to keep plants operating at desired levels. Some are selling cream to balance supply with demand. Buyers are purchasing on an as-needed basis
OUTSIDE MARKETS SUMMARY
September corn declined by 4.75 cents, closing at $5.5025. August soybeans gained 11.50 cents, closing at $14.3375, with August soybean meal up $0.80, ending at $359.60 per ton. September wheat fell 7.75 cents, closing at $7.1125. August live cattle closed unchanged at $123. The DOW declined 107 points, closing at 35,102, while the NASDAQ gained 24 points, closing at 14,860.
