MILK
Even though barrel cheese and dry whey prices increased today, Class III futures struggled to find strength. A few contracts for the rest of this year closed higher while 2023 contracts closed lower. Class IV contracts followed a similar pattern even though butter price declined. The pressure of weaker butter was offset by the gain of nonfat dry milk. The August Class I price was announced at $25.13. This was down $0.74 from July but $8.23 higher than a year ago. USDA will release the June Milk Production report tomorrow. I estimate milk production to be down 1.0% from a year earlier. I estimate cow numbers to be unchanged from May. This report may have an influence on traders as they have been moving the market more from the milk production and cold storage reports than they have in the past. The cold storage report will be released on Friday giving traders a lot to think about over the weekend.
AVERAGE CLASS III PRICES
| 3 Month: | $21.25 |
| 6 Month: | $21.02 |
| 9 Month: | $20.54 |
| 12 Month: | $20.17 |
CHEESE
Cheese plants are still able to get sufficient milk supply to keep production at a steady pace. However, they indicate supply might tighten soon as far as reducing the volume of spot milk available to the market. Offers are dwindling reducing the discounts for spot milk. In the next few weeks, a substantial amount of milk will be moving to the Southeast as the preparation for the school year begins.
BUTTER
It appears butter may retest the low of the price range. If the pattern holds and is repeated, price may bounce back up again. We know price will not remain in a range forever with something needed to move the pendulum one way or the other. U.S. price is above world prices, and with the strong U.S. Dollar, it has made butter on the intentional market rather pricey. Retail sales are reported as soft with high prices of groceries impacting overall demand.
OUTSIDE MARKETS SUMMARY
September corn declined 4.50 cents closing at $5.9225. August soybeans fell 28.25 cents ending at $14.40 with August soybean meal up $1.50 per ton closing at $436.50. September wheat gained 7.25 cents ending at $8.1950. August live cattle gained $0.02 closing at $135.75. September crude oil declined $1.96 closing at $99.88 per barrel. The DOW gained 48 points closing at 31,875 while the NASDAQ gained 185 points closing at 11,898.
