Friday Closing Dairy Market Update - Milk Futures Close the Week Under Pressure

MILK

It has been another brutal week for milk futures with more weakness seen in Class III futures than Class IV futures. Underlying spot prices fell more for cheese than for butter. However, much of the pressure on Class IV futures came from the weakness of Grade A nonfat dry milk. Class III price have now fallen back to a level last seen in early January, while Class IV is back to levels last seen in mid-February, depending on the contract. Milk production has been decreasing seasonally and continues to run below a year ago. USDA will release the June Milk Production report next Thursday. This report generally has not been a market mover, but both it and the cold storage report have risen in prominence and can have significant impact on the market even though they are a month behind and the market has already absorbed the milk and dairy products. Traders now have the weekend to ponder the strength or weakness of the market. Most will watch the weather to see the impact it might have on grains and milk production.

AVERAGE CLASS III PRICES

3 Month:	$20.96
6 Month:	$20.80
9 Month:	$20.37
12 Month:	$20.07

CHEESE

There was limited interest in purchasing cheese this week with the exception of Friday when buyers of barrels came off the bench at lower price. Blocks fell below $2 for the first time since Feb. 28. Block buyers have not shown much interest, as they remain uncertain over demand through the end of the year. For the week, blocks fell 11.50 cents with four loads traded. Barrels fell 11.25 cents with 17 loads traded. Dry whey declined 3.50 cents with five loads traded.

BUTTER

Price tested both the top and bottom of the price range this week. Price reached $3 on Monday, falling back to $2.90 on Thursday. There was a strong possibility price could have moved below $2.90 Friday, but buyers took advantage of the lower price, scooping up 11 loads during spot trading. Demand has slowed but remains good. For the week, butter declined 4 cents with 70 loads traded. Grade A nonfat dry milk fell 8.25 cents with 13 loads traded.

OUTSIDE MARKETS SUMMARY

September corn slipped 0.75 cent, ending at $6.0425. August soybeans declined 5.75 cents, ending at $14.66, with August soybean meal down $7.90, closing at $431 per ton. September wheat declined 18.25 cents, closing at $7.7675. August live cattle declined $0.47, closing at $134.92. August crude oil increased $1.81 per barrel, ending at $97.59. The Dow jumped 658 points, ending at 31,288, while the NASDAQ gained 201 points, closing at 11,452.