MILK
Trading activity after dairy futures were settled for the day indicates further losses tonight. The CME settles contracts shortly after 2 pm Central time based on where the market is trading at that time. This takes place for all commodities that trade until 4 pm Central time. The bearish implications of the June Milk Production report will put further pressure on the market. June milk production gained year-over-year for the first time so far this year. Milk production in the top 24 states increased 0.3% with production per cow up 20 pounds compared to a year earlier. Cow number increased by 4,000 head from May. U.S. milk production gained 0.2% with production per cow up 20 pounds. Cow numbers in the country increased 4,000 head from May. Total cow numbers are 78,000 head below a year ago at 9.423 million head. Second quarter milk production was 0.5% below the same period last year. There were 12 states of the top 24 states which showed production gains over a year ago with the other 12 showing losses. This is a bearish report showing growth at a time when cost of production is high, and inflation has been driving up food prices causing consumers to change their consumption habits. There has been some indication of a slowing of demand for dairy.
AVERAGE CLASS III PRICES
| 3 Month: | $21.02 |
| 6 Month: | $20.79 |
| 9 Month: | $20.35 |
| 12 Month: | $19.99 |
CHEESE
Cheese continued to follow the same pattern today falling lower after a few days of price stability or increase as was the case for barrels. Prices plummeted with a few loads traded but only at lower prices. There is definitely an impact from lower demand leaving buyers less aggressive due to uncertainty over demand through the end of the year. Earlier purchased supply leaves buyers with more product than they need at the present time. The June Cold Storage report may not be friendly to the market either as inventory is expected to increase.
BUTTER
At least butter and nonfat dry milk showed some gains today, but the gains were not enough to trigger strong trader interest leaving Class IV futures mixed. The milk production report may put some pressure on futures, but steady butter and nonfat dry milk prices will provide some support to the market. Butter inventory is expected to see growth during the month of June but likely not enough to gain on last year.
OUTSIDE MARKETS SUMMARY
September corn fell 16.50 cents closing at $5.7575. August soybeans fell 30.50 cents ending at $14.1850 with August soybean meal down $2.10 per ton closing at $434.40. September wheat declined 13.25 cents ending at $8.0625. August live cattle slipped $0.02 ending at $135.72. September crude oil fell $3.53 closing at $96.35 per barrel.
