MILK:
Class III futures settled unchanged to lower in all contracts with the exception of December, which posted a 1-cent gain. Cheese and butter prices improved, but that did not override the bearishness and caution in the market. The inability of spot prices to establish a solid trend leaves traders disillusioned and unwilling to put much premium or keep much premium in the market. Slowing milk output from week to week is having an impact on the amount of spot milk available as well as the amount moving to manufacturing. Manufacturers are seeing a little more breathing room after running at or near capacity for much of the year. However, this is also tightening some cheese supplies for some markets. This is not creating a concern over supply, but just bringing it more in balance. The greater issue that is continually being discussed in the truck driver shortage. This is limited the ability of finish product to find its way to the market in a timely manner. The Labor Day weekend will leave more milk available to manufacturers, but the extra milk will be easily handled. USDA will release the July Dairy Products report Friday, which will show the level of dairy product production for the month compared to the previous year.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.86 |
| 6 Month: | $17.06 |
| 9 Month: | $17.18 |
| 12 Month: | $17.28 |
CHEESE:
Cheese markets may be working toward some stability. Slightly reduced output and steady to higher demand may eventually provide some solid support. Cheese inventories are more closely in line with current demand at a time of year when demand generally improves. Cheese buyers are not concerned over a tightening supply at this time as there is sufficient inventory available to supplement current production. Later in the year, demand for aged cheese and other varieties increases for inventoried cheese as the holidays approach.
BUTTER:
Butter manufacturers are relaying the impact of production due to the shortage of workers. This, along with truck driver shortages, is creating headaches for schedulers and is impacting delivery schedules. Overall butter demand is good and is expected to improve over the next few weeks. Retail sales have been generally steady.
OUTSIDE MARKETS SUMMARY:
September corn gained 0.75 cent, closing at $5.1625. September soybeans closed 1.50 cents higher at $12.7925, with September soybean meal down $5.80 per ton, closing at $337.90. September wheat gained 3 cents, closing at $7.04. October live cattle fell $1.52, closing at $126.05. October crude oil jumped $1.40, ending at $69.99 per barrel. The Dow gained 131 points, closing at 35,444, while the NASDAQ gained 22 points, closing at 15,331.
