MILK
Milk futures closed under pressure in response to lower cheese and nonfat dry milk. Class III futures held up well considering the 5.75 cents decline in block cheese price. Milk futures have a seasonality built into contracts with the highest prices for the year in September. It may not remain that way as there will continue to be volatility with traders reacting to underlying cash prices. The recent weakness of block cheese prices has reduced the optimism the market had been gaining recently. Milk production is decreasing seasonally as well as being impacted by hot weather. Cows will be able to rebound somewhat after the hot spell but may not come back to previous levels in the current lactation. The September Class I price was released today at $18.90. This is an increase of $2.28 from August.
AVERAGE CLASS III PRICES
| 3 Month: | $17.76 |
| 6 Month: | $17.90 |
| 9 Month: | $18.00 |
| 12 Month: | $18.10 |
CHEESE
USDA released the July Cold Storage report today which showed a decrease of inventory in all categories. American cheese inventory declined 15.3 million pounds totaling 838.2 million pounds. This is a decline of 3% from a year ago. Swiss cheese inventory declined 94,000 pounds totaling 22.5 million pounds and about steady with a year ago. Other cheese inventory totaled 627.8 million pounds, down 6.4 million pounds or 2 percent below July 2022. Total cheese inventory was 1.489 billion pounds, down 21.7 million pounds or 2% below a year ago. This should provide some support for the market as inventory running below a year ago at this time of year is not usual.
BUTTER
Butter inventory declined 18.2 million pounds totaling 331.6 million pounds. This is 5% higher than a year ago and 5% lower than June. The higher inventory will keep price subdued with limited upside. Lower world prices and reduced exports are also a factor.
OUTSIDE MARKETS SUMMARY
December corn closed up 11.00 cents per bushel at $4.9050, November soybeans closed up 14.50 cents at $13.6050 and December soybean meal closed up $6 per ton at $401. December Chicago wheat closed up 12.25 cents at $6.3975. October live cattle closed up $0.05 at $178.68. October crude oil is down $1.09 per barrel at $78.55. The Dow Jones Industrial Average is up 184 points at 34,473 with the NASDAQ up 215 points at 13,721.
