MILK
Cheese prices closing higher without falling back from their highs provided some support to Class III milk futures. Traders remained cautious over buying too aggressively into the market. However, after the CME settled the market for the day, Class III milk futures showed further gains indicating futures may be higher overnight as more liquidation may take place. In the electronic market, the CME settles futures that trade until 4 p.m. Central time shortly after 2 p.m. and the average prices of where the market is at that time. Futures will trade for another two hours but will settle back at the settlement prices determined earlier in the day. July and August Class III contracts traded 45-50 cents higher after the futures were settled at 30 to 32 cents higher respectively. This should continue in overnight trade to some extent. Traders will continue to exercise caution as price rallies have been short-lived. The Agricultural Marketing Service announced the formal process of updating the Federal Milk Marketing Order system. This has been talked about for quite some time and has now made it to the stage where it goes through the process required to change the pricing system. This will not change overnight but is expected to possibly be implemented in late 2024 if approved. The Global Dairy Trade auction took place today with the trade weighted average price down 0.9% and the second consecutive decline. There were 23,119 metric tons sold during the event. Anhydrous milk fat price increased 1.8% to $4,728 per metric ton or $2.14 per pound. Butter increased 0.5% to $5,088 per metric ton or $2.31 per pound. Buttermilk powder decreased 2.4% to $2,322 per metric ton or $1.05 per pound. Cheddar cheese increased 7.4% to $4,668 per metric ton or $2.12 per pound. Skim milk powder was unchanged from the previous event at $2,755 per metric ton or $1.25 per pound. Whole milk powder decreased 3.0% to $3,173 per metric ton or $1.44 per pound. Sweet whey powder was not offered at this event.
AVERAGE CLASS III PRICES
| 3 Month: | $16.23 |
| 6 Month: | $17.25 |
| 9 Month: | $17.52 |
| 12 Month: | $17.64 |
CHEESE
Cheese prices increased today but not because of an increase in demand or a tightening of cheese supplies, but because buyers were more aggressive than sellers. As with the butter and powder markets, upside is potentially limited with prices remaining choppy. Inventory has not been growing but has been holding with last year as demand has been good, but supply has been readily available.
BUTTER
The price movement of butter is hinting at an uptrend. However, if it is developing some support, the uptrend has been very slow to develop. Time of year would suggest a greater interest in buying to prepare for demand later in the year. Buyers have not needed to be aggressive so far as there has been sufficient supply available for demand.
OUTSIDE MARKETS SUMMARY
July corn closed up 10.50 cents per bushel at $6.0800, July soybeans closed up 3.25 cents at $13.5325 and July soybean meal closed down $4.50 per ton at $396.70. July Chicago wheat closed up 3.75 cents at $6.2775. August live cattle closed up $2.23 at $175.50. July crude oil is down $0.71 per barrel at $71.44. The Dow Jones Industrial Average is up 10 points at 33,573 with the NASDAQ is up 47 points at 13,276.
