MILK
Milk futures closed steady to higher across the board. Class III outpaced Class IV and was a bit of a surprise. Underlying cash would suggest Class IV would have seen more strength than Class III. Some optimism returned today as cheese prices held steady with butter price increasing. The decline of dry remains somewhat of a concern. Milk production varies across the nation depending on the impact of hot weather coupled with drought conditions. Some have also had a challenge getting corn railed into areas of the South to keep a consistent feed supply. Hot weather in the Southeast is trimming milk output seasonally. Milk supply is reported to be balanced with demand for the time being.
AVERAGE CLASS III PRICES
| 3 Month: | $23.99 |
| 6 Month: | $23.94 |
| 9 Month: | $23.42 |
| 12 Month: | $22.84 |
CHEESE
It is surprising to see spot milk prices in the Midwest remaining as much as $5.00 under class. Some of the main problems seem to be the shortage of employees and supply chain issues. Plants would be able to process more milk if they had a full workforce and could move product quickly. However, block cheese demand is termed as mixed with some reports of a noticeable slowing of demand. On the other hand, curd and barrel cheese demand continues to hold well. USDA will release the May Cold Storage report tomorrow providing a good indication of demand.
BUTTER
Butter demand is holding steady for the time being. It is unclear just how much buyers have already purchased ahead for the third and fourth quarters and what the level of demand will be. For now, cream is readily available even though demand from ice cream production is strong.
OUTSIDE MARKETS SUMMARY
July corn increased 7.25 cents ending at $7.68. July soybeans fell 28.25 cents closing at $16.5275 with July soybean meal up $1.10 closing at $432.40 per ton. July wheat gained 1.25 cents ending at $9.7650. June live cattle declined $1.70 closing at $136.12. August crude oil fell $3.33 closing at $106.19 per barrel. The DOW slipped 47 points closing at 30,483 while the NASDAQ slipped 16 points closing at 11,053.
