MILK
The had been some hope earlier in the week that spot prices had found a bottom and milk futures would be supported. However, that was short lived with traders retaining a bearish attitude as underlying cash prices failed to provide support. Milk production has rebounded somewhat since the hot weather has ceased but is not likely to move back to per-hot weather levels. However, the rebound of milk production is keeping both bottlers and manufacturers supplied with sufficient milk to keep plants busy. Harvesting of corn silage is underway and finished in some areas. Yields are variable with some farmers having to purchase extra standing corn to obtain the desired supply for the year. Others have had carry over from last year's exceptional crop providing sufficient supply. Hay is another story for some areas with prices supply rather expensive already. This may only become worse as the year progresses. It may continue to be difficult to be profitable if milk prices do not become any better. It will take increased demand from both the domestic and international markets. Milk futures have been steady to lower for the week. Interestingly, the weakness of milk futures and corn futures this week has been similar. Historically, there has been a strong correlation between milk and corn.
AVERAGE CLASS III PRICES
| 3 Month: | $18.28 |
| 6 Month: | $18.28 |
| 9 Month: | $18.32 |
| 12 Month: | $18.40 |
CHEESE
For the week blocks declined $4.50 cents with 15 loads traded. Barrels declined 1.75 cents with six loads traded. Dry whey declined 0.25 cent with 13 loads traded. It was a disappointment that cheese prices did not find further support as buying for demand later in the year continues to be met with continued selling of product. Sufficient supply keeps manufacturers wanting to move supply to keep inventory from building. Even though cheese inventory is below a year ago, there is no fear over a shortage of supply.
BUTTER
For the week, butter gained 3.75 cents with 33 loads traded. Grade A nonfat dry milk increased 1.25 cents with 12 loads traded. Price moved above the previous high but fell during the week to remain in the range it has been in for a period. Churning remains active with demand steady.
OUTSIDE MARKETS SUMMARY
December corn closed down 4.25 cents per bushel at $4.7625, November soybeans closed down 20.25 cents at $13.4025 and December soybean meal closed down $7.30 per ton at $392.10. December Chicago wheat closed up 10.50 cents at $6.0425. October live cattle closed up $1.45 at $186.93. October crude oil is up $0.61 per barrel at $90.77. The Dow Jones Industrial Average was down 289 points at 34,618 with the NASDAQ down 218 points at 13,708.
