MILK
Milk futures took a beating across the board today as traders focused on the weakness of block cheese in Class III trading and the fall of the butter price in Class IV trading. Neither of which were positive to the market. Since last week Monday, June Class III futures reached a high of $21.82 and reached a low today of $19.44. The trading action today does not indicate the market has found support. Class IV futures retraced nearly three weeks of gains today in moderate trading activity.
The FDA approved Elanco's Bovaer as a feed additive to reduce methane emissions. Gregg Doud, the President and CEO of the National Milk Producers Federation stated, "Consumers around the world are demanding lower-carbon foods. Innovations such as Bovaer will help U.S. dairy farmers remain globally competitive and maintain their role as leaders in more sustainable dairy production. We thank FDA for its recognition of and support for these efforts." Elanco reports that feeding one tablespoon of Bovaer per lactating dairy cow per day can reduce methane emissions by about 30% or about 1.2 metric tons of carbon dioxide equivalent emissions annually. It is unclear as to the cost of feeding this additive and whether farms could have any monetary incentive to add this to the rations.
AVERAGE CLASS III PRICES
| 3 Month: | $19.26 |
| 6 Month: | $19.44 |
| 9 Month: | $19.25 |
| 12 Month: | $19.09 |
CHEESE
Cheese prices seem to be coasting but showing some signs of weakness. Barrels are in a tighter position holding the price at a premium to blocks. Cheese production is increasing as more schools close for the summer resulting in heavier milk volumes available for manufacturing. Increasing cheese production is not expected to be bearish for the market as inventory remains in line with a year ago according to the cold storage report released last week.
BUTTER
The large decline in butter today was a surprise to the market. Futures fell to the limit of 7.50 cents for the June through December contracts. After that reaction took place, there was no further selling activity that could take place. The last time the price declined of this magnitude was November 7, 2023. Further trading may show further losses as liquidation continues.
OUTSIDE MARKETS SUMMARY
July corn closed down 2.25 cents per bushel at $4.6250, July soybeans closed down 18.50 cents at $12.2950 and July soybean meal closed down $9.90 per ton at $376.60. July Chicago wheat closed up 3.00 cents at $7.0025. August live cattle closed up $0.70 at $181.83. July crude oil is up $2.53 per barrel at $80.25. The Dow Jones Industrial Average is down 217 points at 38,853 with the NASDAQ up 99 points at 17,020.
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