MILK
The action today was similar to what took place last week on Tuesday when cheese prices remained steady from the previous day. Class III futures plummeted that day due to the disappointment of cheese prices continuing higher. There was a repeat of that today with cheese at higher prices than last week. Traders seem concerned that once buyers reach their threshold, there could be price void under the market. Last week that was not the case. Traders are wound up like a spring and quick to jump from one side to the other. Fundamentals have not changed and there have been no surprise announcements to impact the market. If anything, it would suggest there is good support under the market at the present time. Today was the last day to trade July futures and options with the July Federal Order prices to be announced tomorrow.
AVERAGE CLASS III PRICES
| 3 Month: | $17.62 |
| 6 Month: | $17.90 |
| 9 Month: | $17.98 |
| 12 Month: | $18.05 |
CHEESE
Cheese prices held steady as there was very little interest in doing any business today. There was an offer posted for two loads of barrels 8 cents above the market. The action today does not indicate prices have reached a threshold. It seems traders need to continue to see spot prices increase or they will jump out of the market. This makes for a difficult market to predict as it is largely dominated by emotion rather than fundamentals.
BUTTER
The weakness of butter and nonfat dry milk put pressure on Class IV futures. Butter is developing support as buyers turn their attention to later demand and are purchasing on a seasonal basis. Without any concern for tight supply, price might trend higher slowly as buyers increase ownership as they look ahead. Cream supply has tightened but remains available for butter production. Plants are running on reduced schedules allowing some downtime for maintenance.
OUTSIDE MARKETS SUMMARY
December corn closed down 5.75 cents per bushel at $5.0725, November soybeans closed up 9.50 cents at $13.4125 and December soybean meal closed up $2.40 per ton at $398.30. September Chicago wheat closed down 13.50 cents at $6.5225. October live cattle closed up $2.30 at $181.83. September crude oil is up $0.38 per barrel at $82.18. The Dow Jones Industrial Average is up 71 points at 35,631 with the NASDAQ is down 62 points at 14,284.
