MILK
Barrel buyers were not interested in purchasing supply except at a lower price. The quandary now will be whether barrel weakness will drag blocks lower or if blocks will support barrels limiting the downside. The weakness of milk futures is not something we would like to see at this time as the low milk prices have been very difficult and the recent price strength has been welcomed. Demand for spot loads of milk has increased in some areas as milk supply through regular channels has decreased. However, spot load availability is lighter and commanding higher prices than during the first half of the year. Class III milk futures have decreased significantly over the past week with only a limited decline in cheese prices. USDA will release the June Dairy Products report tomorrow.
AVERAGE CLASS III PRICES
| 3 Month: | $17.32 |
| 6 Month: | $17.68 |
| 9 Month: | $17.81 |
| 12 Month: | $17.92 |
CHEESE
There is stronger demand for blocks compared to barrels for the time being. It could be that barrel buyers bought quite a few loads earlier when offers were heavy, leaving more on hand at the present time. There have not been many loads traded on the spot market this week providing no solid indication as to longer-term market direction.
BUTTER
Retail and food service industry demand is termed as steady. Export demand is slower as international butter prices are weaker. Manufacturers are trying to build inventory to provide a cushion for later demand, However, tighter cream supply and reduced milk components will impact the ability to rebuild stocks to any great degree anytime soon.
OUTSIDE MARKETS SUMMARY
December corn declined 7 cents closing at $4.9375. November soybean gained 5.50 cents closing at $13.82 with September soybean meal up $3.20 per ton closing at $427.10. December wheat fell 12.50 cents closing at $6.55. August live cattle gained $0.47 closing at $178.50. September crude oil jumped $2.06 ending at $81.78 per barrel. The Dow declined 67 points closing at 35,216 while the Nasdaq slipped 14 points closing at 13,960.
