MILK
It was about time we saw some strength to milk futures again. The strength may be short lived unless buyers remain aggressive during spot trading next week. There is little to indicate a change in the market anytime soon. Supplies of dairy products are sufficient leaving buyers unconcerned over any supply tightness. Buyers of dairy products are purchasing ahead for Fall and holiday demand but do not need to be aggressive. This leaves underlying cheese prices floundering. Milk futures were under pressure most of the week with the gains Friday mainly from traders getting out of previously sold positions. The increase of butter and cheese prices had little to do with the gain of Class III futures as the market has grown accustomed to short term price bounces only to have the weakness resume. The increase of butter price did have a significant impact on Class IV futures as market fundamentals are more bullish.
AVERAGE CLASS III PRICES
| 3 Month: | $20.13 |
| 6 Month: | $20.43 |
| 9 Month: | $20.40 |
| 12 Month: | $20.36 |
CHEESE
For the week, blocks increased 2.50 cents with only one load traded. Barrels decreased 2.50 cents with nine loads traded. Dry whey decreased 0.50 cent with two loads traded. The July Dairy Products report showed American cheese production up 0.1% over July 2021 totaling 468 million pounds. Italian type cheese production totaled 491 million pounds, up 2.3% over a year ago. Total cheese output reached 1.16 billion pounds, up 1.1%. Dry whey output totaled 85.7 million pounds, up 5.8% over a year ago.
BUTTER
For the week butter gained 1.75 cents with 19 loads traded. Grade A nonfat dry milk declined 4 cents with 18 loads traded. Butter output was strong during July with production reaching 152 million pounds, up 3.1% above July 2021. Nonfat dry milk output totaled 166 million pounds, up 20.2% from a year ago. Skim milk powder production fell 21.1% to a total of 50.8 million pounds. Regular ice cream production was recorded at 62.0 million gallons, down 3.5%.
OUTSIDE MARKETS SUMMARY
September corn gained 10.75 cents, closing at $6.69. September soybean gained 37.75 cents, with September soybean meal down $7.90, ending at $441.10 per ton. September wheat gained 17.50 cents, ending at $7.93. October live cattle jumped $1.75, closing at $144.55. October crude oil closed $0.26 higher at $86.87 per barrel. The Dow declined 338 points, closing at 31,318, while the NASDAQ declined 154 points, ending at 11,631.
