MILK
There was quite a divergence of milk futures today with Class IV milk futures posting significant gains while Class III futures posted losses following the respective underlying cash markets. Milk production is steady to lower in much of the country with production expected to reach a low soon. The impact of hot weather this summer may not result in a rebound of milk to any great degree anytime soon. There is sufficient milk for both manufacturing and bottling. Bottling demand has been increasing as more milk has been moving to fill school pipelines. This should provide some support to cheese prices as there is less available for manufacturing. However, spot milk prices continue to range from $3.00 under class to class. The availability of spot milk is tightening. Likely one reason spot milk isn't tighter is the fact that some plants continue to run below capacity due to labor shortages resulting in less processing. Even with that, supplies remain sufficient and are keeping the market well-supplied. The September Class I price was announced today at $23.62, down $1.51 from the August price.
AVERAGE CLASS III PRICES
| 3 Month: | $20.56 |
| 6 Month: | $20.82 |
| 9 Month: | $20.62 |
| 12 Month: | $20.46 |
CHEESE
There is some indication cheese sales have improved to some extent but prices will continue to fluctuate as buyers and sellers take care of business. Traders will ponder whether the weakness of block cheese today will be the beginning of a retracement or if it was just a matter of no buyers needing to step into the market. It does raise some concern that price declined without any buyer interest. Barrel cheese continues to be in greater demand than blocks.
BUTTER
Price is retesting the upper end of the trading range. However, with more cream becoming available along with steady demand, price is expected to remain in the sideways range. It seems a price over $3.00 may be difficult to maintain for any length of time under current market conditions.
OUTSIDE MARKETS SUMMARY
September corn gained 4 cents closing at $6.15. September soybeans jumped 21 cents closing at $14.7525 with September soybean meal up $4.70 closing at $440.60 per ton. September wheat fell 22.75 cents ending at $7.6325. August live cattle gained $0.45 ending at $141.75. September crude oil gained $1.58 closing at $88.11 per barrel. The DOW declined 172 points closing at 33,980 while the NASDAQ declined 164 points closing at 12,938.
