MILK
The increase in cheese prices of 2.50 cents should have triggered greater buying interest than it had today. Traders remain reluctant to take a long-term position in the market thinking that there will be a limit to upside potential. Some sense of bearishness could stem from the World Agricultural Supply and Demand report which showed an increase in milk prices from the previous estimate but still nothing to get excited about. The average milk prices for next year are estimated lower than this year dimming the outlook. However, USDA releases estimates but changes those estimates based on what the market is doing from one month to the next. There is potential for stronger milk prices if demand increases, and milk supply continues to decline. The important question is the response farmers will have to increasing milk prices. Milk futures show the Class III milk price for August will be about $3.00 per cwt better than July. If culling slows, it may indicate milk price potential might be limited. The Global Dairy Trade Auction trade weighted average fell 7.4% on the event today. Anhydrous milk fat declined 5.3% to $4,452 per metric ton or $2.20 per pound. Butter declined 3.0% to $4,539 per metric ton or $2.06 per pound. Cheddar cheese increased 5.8% to $4,127 per metric ton or $1.87 per pound. Skim milk powder declined 5.2% to $2,333 per metric ton or $1.06 per pound. Whole milk powder fell 10.9% to $2,548 per metric ton or 41.16 per pound. Lactose was not offered at this event.
AVERAGE CLASS III PRICES
| 3 Month: | $17.83 |
| 6 Month: | $17.98 |
| 9 Month: | $18.05 |
| 12 Month: | $18.11 |
CHEESE
Block cheese moving above $2.00 and the highest price it has been since March 28 may bring more buyer interest in the market as some buyers have been holding back anticipating limited upside. However, the move higher may increase the buying interest. We do need to keep in mind that prices have a tendency to fall faster than they increase, but time of year may limit any selling that may take place.
BUTTER
If butter price would increase from the current level, it would move back to the highest level since December 2022. It will be interesting to see just how much upside butter might have due to higher stocks than last year and slow exports. However, churning has decreased slowing production which may move inventory in line with a year ago and provide support to price.
OUTSIDE MARKETS SUMMARY
December corn closed down 12.25 cents per bushel at $4.7550, November soybeans closed down 20.75 cents at $13.0525 and December soybean meal closed down $11.50 per ton at $380.50. September Chicago wheat closed down 17.50 cents at $5.9850. October live cattle closed down $0.70 at $179.98. September crude oil is down $1.46 per barrel at $81.05. The Dow Jones Industrial Average is down 361 points at 34,946 with the NASDAQ down 157 points at 13,631.
