MILK
Class III milk futures declined after spot trading as the weakness of barrel cheese and dry whey increased the concern of traders that upside potential is limited. This bearishness will be difficult to overcome. More reports are coming in of milk output decreasing on farms. The latest round of hot and humid weather in many areas is finally taking a toll on cow comfort. Previous rounds of hot weather have not had quite the impact. Available milk supplies have tightened to some extent, but that is not causing any shortages. More milk moving to deficit areas to fill school pipelines is moving some away from manufacturing, which will give manufacturing plants a little more breathing room. USDA will release the World Agricultural Supply and Demand report Thursday. This report contains estimates for crop production and ending stocks as well as estimates for milk production, milk prices and dairy product prices.
AVERAGE CLASS III PRICES
| 3 Month: | $16.96 |
| 6 Month: | $17.37 |
| 9 Month: | $17.42 |
| 12 Month: | $17.45 |
CHEESE
Manufacturers in the Midwest report that the availability of spot milk has become tighter. More milk is moving to deficit areas to supply the school pipelines leaving less available for manufacturing. Manufacturers still have sufficient supply for production needs, but the discounts spot milk has had are evaporating. As a result, there is more use of nonfat dry milk to fortify vats to keep cheese yields elevated.
BUTTER
Supply and demand remain fairly balanced, leaving price in a down-trending channel. Butter production has been fairly steady in most areas with some plants selling some cream in order to limit production and inventory build. Both retail sales and demand from the food service industry are stable.
OUTSIDE MARKETS SUMMARY
September corn gained 7 cents, closing at $5.5625. August soybeans fell 42 cents, closing at $14.0550, with August soybean meal down $4.90 per ton, closing at $355.40. September wheat closed unchanged at $7.27. August live cattle declined $0.70, ending at $122.95. September crude oil gained $0.96, closing at $69.25 per barrel. The Dow gained 220 points, closing at 35,485, while the NASDAQ slipped 23 points, closing at 14,765.
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