MILK
Milk futures put in another strong day with prices surging higher fueled by the increase of underlying cash prices. It has been an incredible week with Class III futures making large gains with some contracts up over $1.50 per cwt. This certainly changes the attitude of farmers as a bleak outlook turned more positive this week. The aggressive buying of cheese this week propelled price higher, bringing more buyers into the market as they now feel they have been left behind. Buyers were complacent during the first half of the year as sellers remained aggressive due to heavy milk supplies and plentiful cheese supplies. It may seem as if the market changed rather quickly, but the continued weakness of milk prices indicated that farmers needed to cut back on production. Strong cull cow prices encouraged increased culling as extra money was needed to cash flow. It is now trickling down to reality as the reports are released. The Bi-annual Cattle Inventory report showed dairy cattle inventory at the same level of last year at 9.400 million head. Milk cow replacements on July 1 were 3% lower than July 1 last year at 3.650 million head.
AVERAGE CLASS III PRICES
| 3 Month: | $16.06 |
| 6 Month: | $17.21 |
| 9 Month: | $17.55 |
| 12 Month: | $17.10 |
CHEESE
For the week, blocks increased 30.25 cents with 18 loads traded. Barrels increased 26.25 cents with 12 loads traded. Dry whey increased 0.50 cent with 43 loads traded. Buyers were trying to outbid each other the past two days to purchase cheese. This drove the market higher as the fear of being left behind gripped the trade. Cheese buyers must explain to the company why they had not purchased more cheese when prices were low. They need to step up and at least get some on the books.
BUTTER
For the week, butter increased 3.25 cents with 57 loads traded with many of those trades taking place today. Butter may begin to see some spillover from cheese as buyers may also become more aggressive for much of the same reason. Grade A nonfat dry milk increased 1.50 cents with four loads traded.
OUTSIDE MARKETS SUMMARY
December corn closed down 10.00 cents per bushel at $5.3625, November soybeans closed down 3.00 cents at $14.0175 and December soybean meal closed down $2.10 per ton at $408.50. September Chicago wheat closed down 29.50 cents at $6.9750. October live cattle closed down $0.85 at $181.90. September crude oil is up $1.42 per barrel at $77.07. The Dow Jones Industrial Average is up 3 points at 35,228 with the NASDAQ down 31 points at 14,033.
