MILK
Milk futures had somewhat of a quiet day compared to what we have seen many times recently. The increase of cheese prices did not trigger further buying interest in Class III milk futures as the strength was already factored in with the higher close yesterday. Traders are not going to buy futures very aggressively due to the potential for underlying cash prices to remain choppy from one day to the next. This may leave the market neither bullish nor bearish until a trend develops. The Global Dairy Trade auction took place today with the trade weighted average down 5.0%. This is the fourth consecutive decline for the average price. There were 27,500 metric tons of production sold with 161 bidding participants. Anhydrous milk fat declined 1.4% to $5,518 per metric ton or $2.50 per pound. Butter price declined 6.1% to $5,199 per metric ton or $2.36 per pound. Buttermilk powder declined 9.2% to $3,724 per metric ton or $1.69 per pound. Cheddar cheese declined 0.7% to $4,798 per metric ton or $2.18 per pound. Skim milk powder declined 5.3% to $3,524 per metric ton or $1.60 per pound. Whole milk powder declined 6.1% to $3,544 per metric ton or $1.16 per pound. Lactose was not offered at this event.
AVERAGE CLASS III PRICES
| 3 Month: | $20.54 |
| 6 Month: | $20.57 |
| 9 Month: | $20.24 |
| 12 Month: | $19.99 |
CHEESE
The rebound of cheese prices today had little impact on Class III milk futures. The gain only recovered what was lost on Monday. If prices move up and down on a daily basis, trading activity will be very limited. It seems cheese buyers are more willing to step back into the market to purchase supply but only on a limited basis and when the price is right. There has been some indication of retail weakness, but overall demand remains good.
BUTTER
The breakout of butter above the sideways trading range it has been in for two months might indicate buyers may be more aggressive as they look ahead to demand for the rest of the year. Demand during the second half of the year utilizes fresh production and well as inventoried production to meet demand. Current butter inventory is 20% below a year ago. Even though there should be sufficient to meet demand, buyers may want to increase holdings to make sure they have sufficient on hand.
OUTSIDE MARKETS SUMMARY
September corn declined 15.75 cents closing at $5.9125. August soybeans declined 25 cents ending at $15.6925 with August soybean meal up $2.20 per ton closing at $489.20. September wheat declined 25.50 cents closing at $7.7475. August live cattle slipped $0.20 closing at $136.57. September crude oil gained $0.53 closing at $94.42 per barre. The DOW declined 402 points ending at 32,396 while the NASDAQ slipped 20 points closing at 12,349.
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