MILK:
August and September futures closed below $16.00, increasing the concern as to how far down this weakness will carry prices. The market always begins the day cautiously with mixed prices, but bearishness slowly creeps into the market as the morning progresses. The bear picks up steam as one category or the other declines during spot trading. The pattern will not continue indefinitely, but it has a bearish grip on the market presently. The Global Dairy Trade auction event 289 took place Tuesday with the trade weighted average declining 1.0%. This is the eighth consecutive decline. Anhydrous milk fat increased 1.3% to $5,668 metric ton (mt) or $2.57 per pound. Butter increased 3.8% to $4,589 mt or $2.08 per pound. Buttermilk powder fell 8.0% to $3,246 mt or $1.47 per pound. Cheddar cheese increased 0.7% to $4,065 mt or $1.84 per pound. Lactose declined 3.1% to $1,094 mt or $0.50 per pound. Skim milk powder gained 1.5% to $3,020 mt or $1.37 per pound. Whole milk powder declined 3.8% to $3,598 mt or $1.63 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.11 |
| 6 Month: | $16.57 |
| 9 Month: | $16.76 |
| 12 Month: | $16.89 |
CHEESE:
The bright spot is that block cheese price has remained steady for the past five consecutive trading periods. One has to wonder whether the axe will fall soon or whether it will succumb to the pressure of barrels. Cheese stocks did decline during the month of June and are expected to decline through the rest of the year. The concern is whether they will decline as usual or if the decline will be less than typical, resulting in higher inventory by the end of the year.
BUTTER:
The gain of Monday was eliminated Tuesday and then some. Price increases when buyers need to obtain product to fill orders. Once that is finished, there is no one else willing to take up the baton and the market falls back again. The market has been entrenched in this pattern for a period of time. Until supply tightens and inventory begins to decrease, it may remain that way. Unfortunately, the lower trend continues.
OUTSIDE MARKETS SUMMARY:
September corn fell 8.25 cents, closing at $5.5050. August soybeans fell 26.50 cents, ending at $13.9225 with August soybean meal down $9.40 per ton, closing at $347.80. September wheat declined 5.0 cents, closing at $7.2450. August live cattle gained $1.12, ending at $123.25. September crude oil declined $0.70, closing at $70.56 per barrel. The DOW gained 278 points, ending at 35,116 while the NASDAQ gained 80 points, closing at 14,761
