MILK
Traders did not have much to go on today with unchanged prices in underlying cash except for dry whey. The minimal price increase was not enough to get the interest of buyers in Class III futures. There will need to be some stronger underlying prices over the next few weeks or July will begin to roll down to the level at which June currently is. Spring flush is past, but milk production levels continue to remain high. Current weather is not a hindrance for milk production, but it is becoming a greater problem for crop development. The corn crop condition is currently 61% good/excellent. Soybeans are 59% good/excellent. This compares to 72% good/excellent for corn a year ago and 70% good/excellent for soybeans compared to a year ago. Historically, there has been a strong correlation between corn and milk, but this year might be the exception.
AVERAGE CLASS III PRICES
| 3 Month: | $15.95 |
| 6 Month: | $17.04 |
| 9 Month: | $17.37 |
| 12 Month: | $17.51 |
CHEESE
It was good to at least see cheese prices steady today. However, steady prices are not what we want to see, especially when milk prices are this low. There is nothing to trigger any strong buying interest for the near term or even to build inventory for later in the year. There is no indication at this point that supply will tighten as milk production and cheese production is strong.
BUTTER
The current butter market is similar to what it was in 2018-2019 when price remained in a range for about 8 months before it broke out of that range. Even though ice cream production has increased, there remains sufficient cream available to keep butter production strong and demand satisfied. Price is expected to continue to remain range bound.
OUTSIDE MARKETS SUMMARY
July corn closed up 13.00 cents per bushel at $6.1725, July soybeans closed down 13.75 cents at $13.7275 and July soybean meal closed up $.20 per ton at $397.40. July Chicago wheat closed up 3.50 cents at $6.3375. August live cattle closed up $1.35 at $173.20. July crude oil is down $2.96 per barrel at $67.21. The Dow Jones Industrial Average is up 190 points at 34,066 with the NASDAQ is up 203 points at 13,462.
