MILK
Milk futures rebounded during the second half of the week relieving the oversold condition of the market. However, even though block cheese price increased today, traders remain skeptical. The market shift has been more bearish and it will take a monumental effort in order to regain the losses. The market is likely moving contra seasonal as inflation is having a larger impact on overall demand. There has not been much news about the level of demand we are seeing, but the building of inventory says a lot about it. If production and demand continue at the same pace, inventory will continue to increase. Production is lower than a year ago, but demand is slowing as well. This could keep sufficient supplies available for demand and then some leaving upside price potential limited.
AVERAGE CLASS III PRICES
| 3 Month: | $22.28 |
| 6 Month: | $22.24 |
| 9 Month: | $27.72 |
| 12 Month: | $21.27 |
CHEESE
For the week, blocks declined 6.25 cents with 2 loads traded. Barrels declined 2.25 cents with 3 loads traded. Dry whey declined a penny with 2 loads traded. It is too early to tell if cheese prices have found a bottom. The recent pattern has been that any price increase was short-lived only to move to lower lows again. It would not appear that prices could go any lower but who knows? There is no reason to think buyers will step up to the plate anytime soon if cheese continues to be available to the market. Buyers are uncertain over demand through the second half of the year which may keep buying limited.
BUTTER
For the week, butter declined 4 cents with 47 loads traded. Grade A nonfat dry milk declined 5.50 cents with 12 loads traded. Trading activity this week was unusually high for both categories in general and especially due to the fact that it was a 4-day week. Even at the current high price of butter, buyers remain interested in purchasing to maintain and build inventory.
OUTSIDE MARKETS SUMMARY
July corn jumped 31.50 cents closing at $7.7825. July soybeans jumped 39 cents closing at $16.3025 with July soybean meal up $8.40 closing at $478.40 per ton. July wheat umped 54.75 cents closing at $8.7925. August live cattle declined $0.60 closing at $133.95. August crude oil gained $2.06 closing at $104.79 per barrel. The DOW declined 46 points closing at 31,388 while the NASDAQ gained 14 points closing at 11,635.
