MILK
Class I orders have slowed as bottlers reduce the amount bottled for school accounts. This leaves sufficient milk available for processing needs. There is little concern over tight milk supply at present as milk production continues to increase seasonally. Traders anticipate overall strong demand will continue with milk consumption increasing at the retail level as more milk will be consumed at home rather than at school. However, higher prices at the retail level may reduce some of the purchasing that may have otherwise taken place. I know this may sound a bit bearish, but it may be a reality as some purchases and consumption may move to other choices due to prices. However, this may be negligible in the overall market. Milk remains a staple for consumption and good health. Class III milk futures defied underlying cash today closing strongly higher. Class IV futures closed higher based on the strength of underlying cash.
AVERAGE CLASS III PRICES
| 3 Month: | $24.59 |
| 6 Month: | $24.24 |
| 9 Month: | $23.68 |
| 12 Month: | $22.99 |
CHEESE
Manufacturing plants continue to deal with labor shortages as well as supply chain issues. Plants are running at capacity relative to the labor force and not at total capacity. It is probably a good thing that milk production is not exceeding year-ago levels or there would be much more milk on the spot market. Retail sales are reported to be firm with some areas indicating a slight slowing of demand. Buyers have stepped back from the market over the past two days as they already have some purchased ahead and see no need to become overly aggressive.
BUTTER
Price continues to work higher seemingly with the goal of reaching back to the high of the year established in January at $2.9350. Buyers have been aggressive over the past two weeks filling orders or increasing ownership for later demand as they see production slowing seasonally with concern over inventory not gaining on last year. However, churns may have more cream available than usual this summer as some ice cream manufacturers have reduced cream usage due to problems getting other ingredients for ice cream production.
OUTSIDE MARKETS SUMMARY
July corn closed 0.50 cents higher closing at $7.7225. July soybeans declined 12 cents ending at $16.81 with July soybean meal down $2.90 per ton ending at $424.20. July wheat declined 6.50 cents closing at $11.4825. June live cattle declined $0.42 ending at $132.30. July crude oil gained $0.56 closing at $110.33 per barrel. The DOW closed 192 points higher at 32,120 while the NASDAQ gained 170 points closing at 11,435.
