MILK
Class III milk futures did come back a bit from the pressure that came into futures after spot cheese, butter and dry whey remained steady. A mixed close to milk futures was positive as traders might have decided steady prices may not be bearish after all. Milk production is termed as mixed this week. Cooler weather has improved cow comfort but a rebound to previous levels may be difficult to realize. Hot weather will return later this week and remain for a period impacting milk output again. Class IV futures took a hit as traders reacted to the weakness of nonfat dry milk. Class III futures are above Class IV futures from September through February contracts. This has been a rarity over the past two years. USDA announced the August Federal Orde class prices today. The Class II price was $19.91, up $0.79 from July and $7.00 below August 2022. The Class III price was $17.19. up $3.42 from July but down $2.20 from a year ago. The Class IV price was $18.91, up $0.65 from July but down $5.90 from August 2022.
AVERAGE CLASS III PRICES
| 3 Month: | $18.79 |
| 6 Month: | $18.61 |
| 9 Month: | $16.54 |
| 12 Month: | $16.53 |
CHEESE
Manufacturing plants do not have much extra milk to choose from as reduced milk production leaves a limited amount available on the spot market. What is available is commanding a premium over class. Pizza demand has increased due to schools reopening and the beginning of the football season. Cheese demand for pizzas is strong with some indicating they may struggle to meet the needs in the short term. This may provide further support as cheese prices may slowly improve.
BUTTER
Cream supply has increased recently with some plants indicating they have seen steady production throughout the summer. Inventories have remained higher than a year ago so far with the potential to remain above a year ago through the rest of the year. Current demand is termed as steady.
OUTSIDE MARKETS SUMMARY
December corn closed down 6.00 cents per bushel at $4.8075, November soybeans closed down 5.75 cents at $13.8675 and December soybean meal closed down $1.70 per ton at $410.20. December Chicago wheat closed up 6.50 cents at $6.0700. October live cattle closed down $1.43 at $180.05. October crude oil is up $0.47 per barrel at $81.63. The Dow Jones Industrial Average is up 38 points at 34,890 with the NASDAQ up 756 points at 14,019.
