MILK
One thing that can be said about the dairy market is that price can move in mysterious ways. Cheese weakness today saw milk futures close higher. This keeps Class III milk futures in a sideways range. This may indicate support is building under the market, but it is too early to tell. The initial weakness of cheese prices caused quite a bit of concern that the market was going to make another leg down. However, buyers of cheese took advantage of the lower prices to purchase some product. This may be the level at which buyers will find value even though they are uncertain over demand through the rest of the year. Buyers are sitting on some higher priced cheese that was purchased earlier in the year and it would make sense to purchase some at these lower prices in order to average out the cost once this cheese is moved into demand channels. Milk production will be impacted during this period of hot weather leaving reduced milk receipts at the plant level. This will further reduce the amount of spot milk available for purchase. Once heavier milk volumes move to deficit areas for supplying school accounts, spot milk will again command a premium. The income over feed price for June was $11.92. The average soybean meal price for the month was $445.93, a gain of $3.98 per ton from May. FSA had not released these prices until late Friday.
AVERAGE CLASS III PRICES
| 3 Month: | $21.16 |
| 6 Month: | $21.07 |
| 9 Month: | $20.67 |
| 12 Month: | $20.33 |
CHEESE
Lower cheese prices uncovered buying interest. The market may have reached value for the time being with buyers purchasing even though they are uncertain over the level of demand that will be seen through the rest of the year. They had laid off purchasing for a period of time which has reduced some of their holdings. Now they may be a need to purchase to keep ahead of demand and provide a level of supply cushion. The concern is that sellers continue to offer product aggressively rather than hold for possible higher prices.
BUTTER
The market remains non-eventful. Price continues to bounce within a range. Buyers and sellers are comfortable doing business at the current level. Butter output continues to match demand keeping supply from building in comparison with a year ago. Price is expected to remain in the range it has been in for the past two months.
OUTSIDE MARKETS SUMMARY
September corn declined 9.25 cents closing at $6.07. August soybeans fell 42.75 cents ending at $15.9425 with August soybean meal down $8.30 per ton closing at $487.00. September wheat declined 7.50 cents closing at $8.0025. August live cattle gained $0.32 ending at $136.77. September crude oil fell $4.73 ending at $93.89 per barrel. The DOW declined 47 points closing at 32,798 while the NASDAQ declined 22 points closing at 12,369.
