MILK
There is some expectation of milk receipts declining at the plant level due to hot weather. The level of impact is difficult to estimate due to the strides made over the years to improve cow comfort. Nevertheless, hot weather is hot weather, and it will always have a level of impact. Milk supply is available for both bottling and manufacturing with spot milk available at a discount. However, spot milk is not carrying as much of a discount as it had been, and extra milk supplies have tightened. Class III milk futures were able to close higher today even though cheese prices decreased. Traders seemed unwilling to press the market to the downside as prices could be at or near support. Class IV is in a little better position as butter price continues to remain strong. It will be interesting to see whether overnight trading activity will show further follow-through. The corn crop condition remained unchanged from the previous week at 64% good/excellent. The soybean crop showed a decrease of one% to 61% for the good/excellent category. The winter wheat crop is 70% harvested.
AVERAGE CLASS III PRICES
| 3 Month: | $21.14 |
| 6 Month: | $32.02 |
| 9 Month: | $20.59 |
| 12 Month: | $20.73 |
CHEESE
Price has not yet been able to find a bottom. The slight bounce of barrels from the low during spot trading does not provide sufficient indication buyers have found a level at which to purchase. As long as sellers of cheese remain aggressive, buyers may hold back waiting for lower prices. Sellers might also be unwilling to put further pressure on the market as they would like the value of their supply of product to increase. They do like selling cheese made from milk that had been purchased at higher prices.
BUTTER
Price looks as if it is going to challenge the top end of the price range again. It is interesting to see buyers remaining aggressive even at the higher price. There may be more downside risk than upside potential due to some slowing of demand. However, buyers seem to want to increase ownership of supply in case milk and cream tightens as the year progresses.
OUTSIDE MARKETS SUMMARY
September corn gained 8 cents closing at $6.1225. August soybeans jumped 31.25 cents ending at $14.9725 with August soybean meal closing at $3.50 higher at $434.50 per ton. September wheat jumped 36 cents ending at $8.1275. August live cattle gained $0.70 closing at $135.62. August crude oil gained $5.01 per barrel closing at $102.60. The DOW declined 216 points ending at 31,073 while the NASDAQ declined 92 points closing at 11,360.
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