MILK
Class III milk futures closed substantially lower with losses of up to 65 cents in the December contract. This was a little extreme due to spot markets remaining unchanged. There was very light trading activity in later contracts which can magnify the move. The selling activity was aggressive to have that much of a price change that was not supported by cash. It is unclear what triggered the aggressive selling other than the disappointment in the inability of cheese prices to post gains. The market was due for a retracement, but this was a bit overdone. It will be interesting to see what takes place tomorrow when the market settles down overnight. Class IV futures showed minor losses, likely feeling a little pressure from the decline of Class III futures.
AVERAGE CLASS III PRICES
| 3 Month: | $16.36 |
| 6 Month: | $17.41 |
| 9 Month: | $17.74 |
| 12 Month: | $17.93 |
CHEESE
USDA released the June Cold Storage report which was neutral to the market. American cheese inventory totaled 853.3 million pounds, down 3.8 million pounds from May and up one percent from a year ago. Swiss cheese inventory totaled 22,6 million pounds, down 1.7 million pounds from May and down 8% from a year ago. Other cheese inventory totaled 634.4 million pounds, an increase of 18.0 million pounds from the previous month and nearly the same as a year ago. Total cheese inventory reached 1.510 billing pounds, up 12.6 million pounds from May and about even with a year ago.
BUTTER
Butter inventory for June declined 20.4 million pounds from the previous month but was still 5% above a year ago. This is positive in that inventory began to decline during the month with inventory not much more than it was a year ago. With slower churning and increasing buyer interest, inventory should continue to decline.
OUTSIDE MARKETS SUMMARY
December corn closed down 3.00 cents per bushel at $5.6525, November soybeans closed down 4.50 cents at $14.2000 and December soybean meal closed up $4.50 per ton at $416.10. September Chicago wheat closed up 2.75 cents at $7.6025. October live cattle closed down $0.70 at $179.60. September crude oil is up $0.89 per barrel at $79.63. The Dow Jones Industrial Average is up 27 points at 35,438 with the NASDAQ up 86 points at 14,145.
