MILK
Class III futures had a fire lit under them again today as cheese prices showed strength. Traders have become more optimistic. It seemed buyers are trying to outbid each other again to obtain product. The availability of cheese and current milk production would not suggest buyers should be this aggressive, but emotion and psychology can move the market more than anticipated or even logically. However, seasonally, buying should be more aggressive beginning at this time of year and continue for a few months. A better milk price outlook may slow culling as farmers will want to hold cows if the milk price outlook improves. USDA will release the June Milk Production report Thursday which will show whether culling had increased significantly during the month.
AVERAGE CLASS III PRICES
| 3 Month: | $15.39 |
| 6 Month: | $16.52 |
| 9 Month: | $16.97 |
| 12 Month: | $17.21 |
CHEESE
Cheese prices have moved higher quickly with blocks outpacing barrels. The demand for fresh cheese has increased with buyers wanting to purchase at the lowest price possible. The increased buying interest has resulted in higher prices as buyers want to outbid each to purchase cheese at the best price possible. Many cheese plants are running on full schedules, being able to purchase spot milk at a discount if more is needed. It may take some time for the overall milk supply to tighten.
BUTTER
Price took a breather today after the heavy trading activity yesterday. Maybe much of the immediate demand has been satisfied for the time being. The weakness of nonfat dry milk was not positive for Class IV futures as most contracts declined. Butter may be increasing seasonally, but nonfat dry milk might be an anchor on the market.
OUTSIDE MARKETS SUMMARY
December corn closed up 28.50 cents per bushel at $5.3450, November soybeans closed up 17.25 cents at $13.9525 and December soybean meal closed up $6.80 per ton at $416.20. September Chicago wheat closed up 17.00 cents at $6.7075. October live cattle closed up $1.30 at $183.55. August crude oil is up $1.42 per barrel at $75.57. The Dow Jones Industrial Average is up 367 points at 34,952 with the NASDAQ is up 109 points at 14,354.
