MILK
Milk futures exploded higher Monday, both anticipating and following the gain of spot prices. It has been a long time since milk futures had multiple contracts showing limit-up gains to close the day. August through November Class III milk futures closed up the 75-cent daily limit. There was a pool of contracts that needed to be purchased but were unable to trade due to prices being limit up. This will mean further follow-through Monday evening, as these trades will be able to be executed. August Class III milk closed above $17. September above $18. November and December closed above $19. These levels have not been seen since May 25. Cheese buyers got very aggressive Monday after being very aggressive last week. Buyers are trying to outbid each other to purchase whatever cheese they could. There is a fear of tighter cheese supplies permeating through the market fueling the fire. If prices hold or move higher over the next three weeks, the August milk price could be about $4 per cwt higher than July. There are no Dairy Revenue Protection prices released Monday due to milk futures being limit up.
AVERAGE CLASS III PRICES
| 3 Month: | $16.55 |
| 6 Month: | $17.82 |
| 9 Month: | $18.14 |
| 12 Month: | $18.26 |
CHEESE
Block cheese price has increased 27.75 cents over the past three days. Barrel cheese price has increased 36.50 cents during the same period. Buyer interest has been very strong and does not seem to indicate they have reached a threshold. Sellers are holding back, fueling the buying frenzy. Buyers suddenly found themselves purchasing cheese at a much higher price than they had a week ago. Plentiful world supplies might limit the gains as higher prices will slow international interest further than it already has.
BUTTER
So far, butter has been a follower rather than a leader. It may catch up to some extent. However, fundamentals are a little different with higher inventory compared to a year ago while cheese is slightly below a year ago. USDA will release the June Cold Storage report Tuesday, which should show butter inventory higher than a year ago.
OUTSIDE MARKETS SUMMARY
December corn closed up 32 cents per bushel at $5.6825, November soybeans closed up 22.75 cents at $14.2450 and December soybean meal closed up $3.10 per ton at $411.60. September Chicago wheat closed up 60 cents at $7.5750. October live cattle closed down $1.60 at $180.30. September crude oil is up $1.83 per barrel at $78.90. The Dow Jones Industrial Average is up 184 points at 35,411, with the NASDAQ up 26 points at 14,059.
