Friday Closing Dairy Market Update - Class III Milk Futures Slip Lower, Class IV Higher

MILK

Class III futures tried to hold up as the day progressed, but further pressure was put on contracts. The traders had little to influence them to take a price direction as underlying cash held steady. The front-month June contract adjusted higher as traders anticipated the Federal Order class price for the month. July 2 will be the last trading day as traders anticipate a price near $19.94. Milk production is below a year ago, which should support the July price and likely later contracts. Demand is expected to improve as the year progresses as it generally does through the summer and fall. If demand improves more than expected and milk output does not increase, the supply/demand balance might become bullish. However, farmers will respond to higher milk prices by increasing cow numbers or improving milk output.

The May Agricultural Prices report was released today. The average corn price was $4.51, up $0.12 per bushel from April and down $2.03 from May 2023. The premium/ supreme hay price was $276.00 per ton compared to $260.00 in April and $317.00 per ton for May 2023. The All-milk price was $22.00 per cwt., up $1.50 from April compared to $19.10 a year ago. The average soybean meal price is not in this report and will be released by the FSA on Monday. Other prices to note but are not used in calculating income over feed for the Dairy Margin Coverage program. The average soybean price was $11.90 per bushel compared to $11.80 in April and $14.40 for May 2023. The alfalfa hay price for May was $202.00 per ton compared to $195.00 in April and $279.00 per ton a year ago.

AVERAGE CLASS III PRICES

3 Month:	$19.81
6 Month:	$19.97
9 Month:	$19.63
12 Month:	$19.41

CHEESE

For the week, block cheese gained 6.50 cents with seven loads traded. The barrel cheese price declined 4 cents with five loads traded. The dry whey price gained 2 cents with two loads traded. Spot cheese prices diverged most of the days this week ultimately resulting in blocks moving above barrels.

BUTTER

For the week, butter increased by 3.50 cents with 17 loads traded. The Grade A nonfat dry milk price declined 2.25 cents with 24 loads traded. Butter may move back up to the previous high of $3.1625. Buyers have turned more aggressive with sellers holding for higher prices.

OUTSIDE MARKETS SUMMARY

September corn closed down 15.00 cents per bushel at $4.0750, November soybeans closed down 0.75 cent at $11.0400 and December soybean meal closed down $3.00 per ton at $335.50. September Chicago wheat closed down 6.00 cents at $5.7350. August live cattle closed down $1.03 at $185.43. August crude oil is down $0.28 per barrel at $81.46. The Dow Jones Industrial Average is down 45 points at 39,119 with the NASDAQ down 126 points at 17,733.

Friday Midday Dairy Market Summary - Butter Finds Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	15 Lower
SOYBEANS:	1 Higher
SOYBEAN MEAL:	$1.50 Lower
LIVE CATTLE:	$1.15 Lower
DOW JONES:	14 Points Lower
NASDAQ:	19 Points Lower
CRUDE OIL:	$0.17 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained unchanged at $1.91 and $1.88 respectively with no loads traded in either category. There was one uncovered offer at the close for a load of barrels. The dry whey price increased by 0.50 cents closing at 49 cents with one load traded. Class III futures are mixed ranging from 11 cents lower to 3 cents higher. The butter price increased 1.75 cents closing at $3.1250 with six loads traded. There were four unfilled bids and two uncovered offers remaining at the close. Grade A nonfat dry milk price increased 0.25 cent closing at $1.1825 with one load traded. Class IV futures have only traded in the July contract at 16 cents higher. Butter futures are 0.25 to 2.80 cents higher. Dry whey futures are steady to 0.50 cent lower. USDA will release the May Agricultural Prices report this afternoon providing prices for calculating income over feed. The Quarterly Grain Stocks and Acreage reports were released this morning and were bearish for corn and wheat and friendly for soybeans.

Friday Morning Dairy Market Update - Cheese Prices Remain Choppy

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	3 to 6 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	4 to 6 Higher

MILK:

Class III futures have been slowly settling back from the highs set in mid-June. The choppiness and nearly daily divergence of cheese prices leaves the market with limited support. Milk production remains below a year ago and may remain that way for much of the year. However, higher milk prices will increase the desire to push milk production by improving rations, and cow comfort, and maintaining and adding cows. This will not happen overnight and may take much of the year to see the results. USDA will release the May Agricultural Prices report this afternoon and will provide the average prices used in calculating income over feed for the Dairy Margin Coverage program. The lower feed prices and higher milk prices will likely improve income over feed from the previous month resulting in no payment under the program.

CHEESE:

Cheese is expected to continue the pattern of mixed prices leaving limited market direction. Blocks moved above barrels where it has not been for quite some time. This does not provide long-term direction but moves it to a normal type of market. Prices are expected to remain choppy.

BUTTER:

Price is poised to increase further as buyers have turned more aggressive. Demand is improving at the retail level and buyers are looking ahead to demand later in the year. The upside potential may be limited near term, but the price will remain supported.

Thursday Closing Dairy Market Update - Milk Futures Mixed, Butter Higher

MILK

Milk futures started the day out strong but slowly slipped away as the day went on. Prices were mixed by the settlement, showing slight gains in the prompt months with a pullback in late summer and some returning strength into winter. Milk production is suffering due to the heat but variable across the country.

AVERAGE CLASS III PRICES

3 Month:	$19.97
6 Month:	$20.11
9 Month:	$19.76
12 Month:	$19.51

CHEESE

Cheese futures were mixed today. Cash prices finally brought the price spread back to normal with blocks trading higher than barrels. Cheese demand seems to be picking up; however, production is at maximum capacity.

BUTTER

Butter followed through with the gains from yesterday and continued to rally throughout the day. With stocks about the same as last year, there is concern that the warm temperatures will cause shortages as we move further into the year. We are already seeing tight cream availability so need a break in the weather before we can gain confidence in supply moving forward.

OUTSIDE MARKETS SUMMARY

July corn closed down 6.25 cents per bushel at $4.1375, November soybeans closed down 2.25 cents at $11.0475 and July soybean meal closed unchanged at $360.90. September Chicago wheat closed 19 cents higher at $5.79.50. August live cattle closed down $0.30 at $186.45. August crude oil is up $1.07 per barrel at $81.97. The Dow Jones Industrial Average is up 36 points at 39,164 with the NASDAQ is up 53 points at 17,858.

Thursday Midday Dairy Market Summary - Cheese Prices Diverge

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	3 Lower
SOYBEAN MEAL:	$3.90 Higher
LIVE CATTLE:	$0.62 Higher
DOW JONES:	74 Points Higher
NASDAQ:	51 Points Higher
CRUDE OIL:	$0.62 Higher

MIDDAY MARKET UPDATE:

Block cheese price gained 3 cents closing at $1.91 with two loads traded. The barrel cheese price declined 2 cents closing at $1.88 with one load traded. The block/barrel spread finally moved back to normal with blocks holding a 3 cents premium to barrels. It has been quite some time since blocks were above barrels. The dry whey price remained unchanged at 48.50 cents with no loads traded. Class III futures are mixed ranging from 9 cents lower to 5 cents higher with contracts slipping back from earlier gains. The butter price increased 1.75 cents closing at $3.1075 with two loads traded. Grade A nonfat dry milk price declined by 0.50 cents closing at $1.18 with eight loads traded. Class IV futures have not yet been traded. Butter futures are 0.05 to 4.22 cents higher. Dry whey futures are 0.25 to 0.50 cent higher.

Fluid Milk and Cream - Western U.S. Report 26

Farm level milk production is mixed throughout the West. Milk handlers in California are seeing decreases in farm level milk production as heat continues to adversely affect cow comfort. Contacts have shared milk production is lower than what they typically see for June. That said, some processors noted that unexpected downtime at some plants in the state has freed up milk volumes. Class III demand is strengthening. Cream demand is noted to be steady to weaker. 

In Arizona, milk production is seasonally weak. Contacts share spot loads of condensed skim are in tight supply. 

Farm level milk production is trending weaker in New Mexico. 

Contacts in Utah, Colorado, and Idaho relayed mixed farm level milk outputs. Some contacts noted farm level milk production is trending flat and is in line with milk volumes seen this time last year, while others indicated decreases in milk production. Class I, II, and IV demands are steady. Contacts share Class III demand has strengthened in recent weeks. 

Cream demand is steady. Milk handlers in Oregon and Washington share farm level milk outputs are weaker. Some contacts shared they are seeing less milk than what was forecasted. Demand for all Classes is unchanged from recent weeks. Spot loads of cream are limited. The All-Class cream multiples range was unchanged.

Thursday Morning Dairy Market Update - Spot Prices May Remain Choppy

OPENING CALLS:

Class III Milk Futures:	4 to 8 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	1 to 3 Higher
Soybean Meal Futures:	Steady to $1 Lower
Wheat Futures:	1 to 3 Higher

MILK:

The underlying cash prices did not provide the strong support seen in Class III futures on Wednesday. The strength seemed to stem from the bullish nature of the cold storage report. Milk production running lower than a year ago is positive for milk prices. However, manufacturers have sufficient milk supply to maintain production leaving them unconcerned about a shortage. Higher milk prices have slowed culling on increased cow numbers. Cow numbers in May were 68,000 head lower than a year ago, but cow numbers have moved to the highest level since October. This could result in higher milk output later in the year. The May Agricultural Prices report will be released on Friday with the income over feed price expected to be higher than last month resulting in no Dairy Margin Coverage payment.

CHEESE:

Cheese prices have been choppy and are expected to remain choppy in the near term. Buyers and sellers are taking care of business without much fanfare. Cheese demand is improving for some varieties with plants indicating that their current cheese production is committed and they are not taking on any new customers.

BUTTER:

The lower butter price finally spurred buying interest on Wednesday with buyers having to bid up to obtain supply. The strength will result in sellers holding back to see how aggressive buyers will be. Butter production will slow over the coming weeks as the cream supply tightens and plants shut down for seasonal maintenance.

Wednesday Closing Dairy Market Update - Milk Futures Post Strong Gains

MILK

Milk production is variable across the country. The recent hot weather has impacted cow comfort and affected milk output. This is seasonal and not unexpected. Even with the impact of hot weather, spot milk prices are like what they have been in the past weeks ranging from $1.00 to $2.00 under class. This may change as the summer progresses but there is no concern over a milk shortage. The volatility of milk futures continues with the perception of traders moving futures dramatically. There was no reason for the large increase in Class III milk futures today as the strength of blocks was more than offset by the decline of barrels. Many contracts closed near the highs of the day. This would suggest there could be further follow-through buying.

AVERAGE CLASS III PRICES

3 Month:	$20.03
6 Month:	$20.15
9 Month:	$19.79
12 Month:	$19.53

CHEESE

Cheese demand is reported mixed across the country. Some manufacturers report they are not taking on any more customers as they are producing for current orders and have no room to take on any new customers. Some manufacturers report demand is improving and is running above year-earlier levels. This was indicated in the cold storage report released on Tuesday as cheese inventory declined in May with inventory below a year ago.

BUTTER

Butter production has begun to slow as cream supply is tightening. The hot weather is impacting butterfat, and the milk supply is beginning to decrease. Manufacturers have anticipated reduced production and have been actively trying to build inventory. However, the cold storage report showed butter supply only 3% above a year ago. Butter inventory should decline seasonally through the end of the year as churning slows and demand improves. The butter price moved low enough to trigger the interest of buyers today. This may carry through on Thursday with sellers holding back waiting for higher prices.

OUTSIDE MARKETS SUMMARY

July corn closed down 5.50 cents per bushel at $4.2000, November soybeans closed down 4.50 cents at $11.0700 and July soybean meal closed down $4.40 per ton at $360.90. September Chicago wheat closed steady at $5.6050. August live cattle closed up $2.33 at $186.75. August crude oil is up $0.07 per barrel at $80.90. The Dow Jones Industrial Average is up 16 points at 39,128 with the NASDAQ is up 88 points at 17,805.

Wednesday Midday Dairy Market Summary - Milk Futures Rebound

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$4.50 Higher
LIVE CATTLE:	$3.72 Higher
DOW JONES:	29 Points Higher
NASDAQ:	42 Points Higher
CRUDE OIL:	$0.47 Higher

MIDDAY MARKET UPDATE:

The block cheese price gained 0.75 cent, closing at $1.88 with three loads traded. The barrel cheese price declined a penny, closing at $1.90 with two loads traded. There were two unfilled bids and one uncovered offer remaining at the close of spot trading. The barrel cheese price declined a penny, closing at $1.90 with two loads traded. There was one unfilled bid and two uncovered offers remaining at the close. This moves the inverted block/barrel spread to 2 cents. The dry whey price remained steady at 48.50 cents with no loads traded. Class III futures were higher this morning and have gained strength as the day progresses. Contracts are 1 to 59 cents higher with October showing the greatest strength. The butter price jumped 5.75 cents, closing at $3.09 with two loads traded. Grade A nonfat dry milk slipped 0.25 cent, closing at $1.1850 with three loads traded. Class IV futures have only traded in the July contract at 7 cents higher. Butter futures are 4.75 to 6.50 cents higher. Dry whey futures are 0.10 to 0.30 cent lower.

Wednesday Morning Dairy Market Update - Lower Cheese Inventory May Support Prices

OPENING CALLS:

Class III Milk Futures:	10 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	3 to 8 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	1 to 3 Higher

MILK:

Milk futures may have been overdone to the downside Tuesday, prompting the higher overnight trade. Support might also stem from cheese stocks in May being below a year ago. If demand increases and milk production remains below a year ago, the supply could tighten, resulting in higher milk prices. However, the increase in cow numbers moving the nation's dairy herd to the highest level since October could result in increased milk output later in the year. Summer weather will take its toll on cow comfort and milk production but it is difficult to say how much impact it will have. Farms have made great strides in keeping cows comfortable and milk output strong.

CHEESE:

Cheese inventory generally increased in May and the decline in inventory is friendly to the market. The only category of cheese showing an increase from April was the Other Cheese category. This is any cheese not considered American or Swiss. Cheese buyers may not be aggressive Wednesday if cheese is offered on the spot market.

BUTTER:

It has been a bit surprising buyers have not been more aggressive at the lower prices. The butter price is unlikely to decline below $3.00, but there is sufficient supply for demand, which may leave the price in a range. A tightening cream supply will reduce output in the coming weeks.

Tuesday Closing Dairy Market Update - Cheese Inventory Declines

MILK

Class III milk futures retested the lows of a week ago keeping the volatility alive and well. Futures should not have fallen as much as they had in correlation to the underlying cash prices. However, futures adjusted to the level traders think it might be going. It may have been overdone for the day as emotions were running high. If underlying cash prices show limited movement on Wednesday, contracts might rebound as the market adjusts. One has to wonder if prices have peaked for the year based on the limited buying interest in butter and cheese. Buyers see sufficient supplies of products available for the current demand with some being purchased for demand later in the year. Class IV futures did not trade this morning, but limited trading activity this afternoon has contracts posting double-digit losses.

Grain futures showed significant losses as crop conditions remain good with chances of rain in the drier areas over the next few days. Some areas are unusually wet or flooded, but that has not been a concern for the trade. The corn crop is in 69% good/excellent condition compared to 50% a year ago. The soybean crop is in 61% good/excellent condition compared to 57% a year ago.

AVERAGE CLASS III PRICES

3 Month:	$19.89
6 Month:	$19.95
9 Month:	$19.52
12 Month:	$19.33

CHEESE

The May Cold Storage report showed American cheese stocks decreasing by 4.5 million pounds from April totaling 821.0 million pounds. This is 4% below a year ago. Swiss cheese stocks totaled 21.7 million pounds, down 260,00 pounds from April or 11% below a year ago. Other cheese inventory totaled 599.9 million pounds, up 4.0 million pounds from April but down 3% from a year ago. Total cheese inventory reached 1.443 billion pounds, down 720 pounds from April and 4% below a year ago.

BUTTER

Butter stocks increased by 18.1 million pounds totaling 380.3 million pounds. This is a gain of 3% over a year ago. During April, inventory was 9% above a year ago. Stocks increased in May, but not at the same pace as last year, leaving less of a cushion for demand during the second half of the year.

OUTSIDE MARKETS SUMMARY

July corn closed down 8.00 cents per bushel at $4.2550, November soybeans closed down 19.00 cents at $11.1150 and July soybean meal closed down $7.50 per ton at $365.30. September Chicago wheat closed down 10.50 cents at $5.6050. August live cattle closed down $0.40 at $184.43. August crude oil is down $0.80 per barrel at $80.83. The Dow Jones Industrial Average is down 299 points at 39,112 with the NASDAQ up 221 points at 17,718.

Tuesday Midday Dairy Market Summary - Class III Futures Fall

OUTSIDE MARKETS SUMMARY:

CORN:	9 Lower
SOYBEANS:	13 Lower
SOYBEAN MEAL:	$8.90
LIVE CATTLE:	$0.60 Higher
DOW JONES:	310 Points Lower
NASDAQ:	183 Points Higher
CRUDE OIL:	$0.62 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1.75 cents closing at $1.8725 with no loads traded. There were two loads offered with no buyers showing up to do any business. The barrel cheese price declined by 0.50 cent closing at $1.91 with one load traded and two uncovered offers remaining at the close. The dry whey price gained 1.50 cents closing at 48.50 cents with one load traded. The weakness of cheese sent Class III futures lower as traders were quick to sell the market. Futures range from 4 to 72 cents lower with August taking the brunt of the selling. Trading activity is large with the July and August contracts nearing 1,000 contracts traded in each. The butter price declined 3.25 cents closing at $3.0325 with six loads traded. This is the lowest price since May 30 moving it below the sideways range in which it had been trading. Nonfat dry milk declined 0.50 cent closing at $1.1875 with seven loads traded. Class IV futures have not yet been traded. Butter futures are 1.47 to 3.25 cents lower. Dry whey futures are 0.15 cent lower to 0.27 cent higher. USDA will release the May Cold Storage report this afternoon.

Tuesday Morning Dairy Market Update - May Cold Storage Report Today

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 6 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	4 to 7 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	2 to 4 Lower

MILK:

Class III milk futures moved higher Monday as traders focused more on the strength of blocks than the weakness of barrels. The higher block price offset the lower barrel price but traders also seem optimistic about the potential for cheese prices to increase. This may be heightened by the milk production report showing milk output in May down 0.9%. Butter and cheese demand generally increases during the second half of the year and inventory declines. If milk production remains below a year ago, the supply of dairy products could tighten. The Wisconsin Department of Agriculture, Trade, and Consumer Protection requires testing for Influenza A in lactating dairy cattle before moving cattle to fairs or exhibitions to limit the spread of avian flu among dairy cattle.

CHEESE:

It seems barrel cheese is more abundant as the price spread between barrels and blocks is narrowing. Cheese production is steady as more milk has been moving to manufacturing. However, inventory is not expected to be increasing over the level of a year ago. The May Cold Storage report will be released this afternoon and is expected to show cheese inventory in line with a year ago.

BUTTER:

The butter price is at the bottom of the recent range it has been trading. Buyers may increase purchases at the lower price as they look ahead to demand late in the year. Some contracting is being done for fourth-quarter needs. Retail demand is improving while food service demand is lower than expected for this time of year.

Monday Closing Dairy Market Update - Milk Futures Settle Back

MILK

Traders tried to capitalize on the friendly milk production number from the May Milk Production report released on Friday. The increase of block cheese price added to the bullishness during and after spot trading but much of that ran its course during the rest of the day. Futures fell back substantially from their highs. Futures eventually moved more in line with cash. Class IV futures eventually traded with contracts posting lower prices. Traders realized milk production for May was already absorbed into the market with lower-than-expected milk production for the month not resulting in any supply tightness during the month and so far in June. Milk futures have retraced from the highs but are not too much lower. Further buying interest in underlying cash could result in contracts revisiting those highs and moving potentially higher. There is about half of the year to go, and it is the time when demand generally improves.

AVERAGE CLASS III PRICES

3 Month:	$20.19
6 Month:	$20.15
9 Month:	$19.75
12 Month:	$19.49

CHEESE

The block cheese price is gaining ground on the barrel price with only a 2.50-cent inversion. Barrel supply seems more abundant, and the price could move below blocks in the coming weeks. Buyers will remain willing to purchase at lower prices but may not be interested in aggressively bidding prices higher. Demand should slowly improve as the summer progresses and buyers look ahead to fall and demand later in the year. USDA will release the May Cold Storage report on Tuesday afternoon. It is not expected to show any significant increase in stocks.

BUTTER

The weakness of the butter price today was a surprise as it was anticipated buyers would step up at the lower price. Sellers remained willing to sell supply even at lower prices. However, the current butter price is historically high and profitable for manufacturers. The price is just not as high as it had been a few weeks ago.

OUTSIDE MARKETS SUMMARY

July corn closed down 1.50 cents per bushel at $4.3350, July soybeans closed up 14.75 cents at $11.7525 and July soybean meal closed up $11.00 per ton at $372.80. September Chicago wheat closed down 4.75 cents at $5.7100. August live cattle closed up $1.68 at $184.83. August crude oil is up $0.97 per barrel at $81.70. The Dow Jones Industrial Average is up 261 points at 39,411 with the NASDAQ down 193 points at 17,497.

Monday Midday Dairy Market Summary - Traders Focus on Higher Blocks

OUTSIDE MARKETS SUMMARY:

CORN:	6 Lower
SOYBEANS:	14 Higher
SOYBEAN MEAL:	$12.60 Higher
LIVE CATTLE:	$1.10 Higher
DOW JONES:	276 Points Higher
NASDAQ:	120 Points Lower
CRUDE OIL:	$0.51 Higher

MIDDAY MARKET UPDATE:

The block cheese price gained 4.50 cents closing at $1.89 with two loads traded. There were two unfilled bids and one uncovered offer remaining. The barrel cheese price slipped by 0.50 cent closing at $1.9150 with one load traded. The dry whey price remained unchanged at 47 cents with no loads traded. Traders are focusing on blocks pushing Class III futures 1 to 30 cents higher. Trading activity is moderate as traders are not thoroughly convinced the market will begin to trend higher. The butter price closed at $3.0650 with one load traded. Grade A nonfat dry milk price declined 1.25 cents closing at $1.1925 with five loads traded. Class IV futures have not yet been traded. Butter futures are 0.25 to 2.50 cents lower. Dry whey futures are 0.25 to 0.52 cent lower.

Monday Morning Dairy Market Update - Milk Production Report Provides Little Direction

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	3 to 6 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	Mixed

MILK:

Milk output in May was 0.9% below a year ago, which was lower than expectations. However, that was offset to some extent by the increase in cow numbers of 5,000 head. Yes, cow numbers are 68,000 head less than a year ago, but cow numbers are at the highest level since October 2023. The lower milk production was already factored into the market, resulting in limited trading activity overnight and mixed prices. The main focus will be whether cheese prices have declined sufficiently for buyers to step up and take advantage of the lower prices. The lower milk production may increase buyer interest, but that has already been absorbed into the market and has moved into the supply and demand channels. Hot weather and extremely wet weather in some areas may hurt milk production moving through the end of the month. Currently, there is sufficient milk available for bottling and manufacturing.

CHEESE:

Cheese is available and sellers have been moving supply to the spot market. There has been little interest in holding onto cheese for a potential price increase later in the year. Inventory has not been building but that has not provided consistent support. The May Cold Storage report will be released on Tuesday.

BUTTER:

Butter price is expected to remain in a range for the near term. Churning has been active with the intent to build inventory. Cream supply is tightening and will reduce butter output in the coming weeks. Both domestic and international demand is improving.

Friday Closing Dairy Market Update - May Milk Production Declined 0.9%

MILK

Class III futures closed significantly lower for the week. This was in reaction to the decline of spot cheese prices. Fortunately, milk futures rebounded in the second half of the week or greater losses would be seen. USDA released the May Milk Production report which showed milk production was lower than a year ago. Production in the top 24 states was 0.7% below May 2023. April milk production was revised 0.1% lower than reported last month. Milk production per cow averaged 2,122 pounds or 3 pounds below a year ago. Cow number increased by 5,000 head above April but 52,000 head less than a year ago. Milk production in the country declined by 0.9% from May 2023. Production per cow averaged 2,105 pounds or 3 pounds below a year ago. Cow numbers increased by 5,000 head in the United States. This shows cow numbers increased only in the top 24 states.

The surprise of the report is the increase in cow numbers. It was not completely unexpected that culling slowed, but the surprise was the increase in cow numbers from the previous month. Cow numbers in the U.S. totaled 9.35 million head, 68,000 head less than May 2023. This report is neutral to the market and should not result in much volatility on Monday.

AVERAGE CLASS III PRICES

3 Month:	$20.13
6 Month:	$20.13
9 Month:	$19.77
12 Month:	$19.52

CHEESE

For the weed, block cheese price declined 12.50 cents with 34 loads traded. Barrel cheese price declined 10 cents with 34 loads traded. The dry whey price remained unchanged with two loads traded. Cheese buyers did not need to be aggressive as sellers continued to offer cheese to the spot market. Selling will need to dry up or prices will continue to erode. There is little concern over the cheese supply for the time being. With cow numbers increasing in May, buyers may remain unaggressive.

BUTTER

For the week, the butter price remained unchanged with 12 loads traded. Grade A nonfat dry milk price increased by 1.25 cents with six loads traded. Buyers and sellers of butter are comfortable at the current price level with the price holding in a tight range over the past two weeks.

OUTSIDE MARKETS SUMMARY

July corn closed down 4.75 cents per bushel at $4.3500, July soybeans closed up 5.25 cents at $11.6050 and July soybean meal closed up $4.20 per ton at $361.80. July Chicago wheat closed down 11.25 cents at $5.6150. August live cattle closed up $0.60 at $183.15. August crude oil is down $0.71 per barrel at $80.58. The Dow Jones Industrial Average is up 16 points at 39,150 with the NASDAQ down 32 points at 17,689.

May Milk Production in the United States down 0.9 Percent

May Milk Production down 0.7 Percent        

Milk production in the 24 major States during May totaled 18.9 billion pounds, down 0.7 percent from May 2023. April revised production, at 18.3 billion pounds, was down 0.4 percent from April 2023. The April revision represented a decrease of 27 million pounds or 0.1 percent from last month's preliminary production estimate.  

Production per cow in the 24 major States averaged 2,122 pounds for May, 3 pounds below May 2023.  

The number of milk cows on farms in the 24 major States was 8.89 million head, 52,000 head less than May 2023, but 5,000 head more than April 2024.   

May Milk Production in the United States down 0.9 Percent  

Milk production in the United States during May totaled 19.7 billion pounds, down 0.9 percent from May 2023.  

Production per cow in the United States averaged 2,105 pounds for May, 3 pounds below May 2023.  

The number of milk cows on farms in the United States was 9.35 million head, 68,000 head less than May 2023, but 5,000 head more than April 2024. 

Friday Midday Dairy Market Summary - Class III Futures Hold Slight Gains

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	4 Higher
SOYBEAN MEAL:	$3.60 Higher
LIVE CATTLE:	$0.67 Higher
DOW JONES:	10 Points Lower
NASDAQ:	46 Points Lower
CRUDE OIL:	$0.70 Lower

MIDDAY MARKET UPDATE:

Block cheese price declined by 0.75 cent, closing at $1.8450 with 11 loads traded. The barrel cheese price declined a penny, closing at $1.92 with seven loads traded. The barrel price bounced from the low but blocks remained on the low of spot trading. There were unfilled bids and offers remaining at the close. The dry whey price declined a penny, closing at 47 cents with one load traded. Class III futures post single-digit gains as traders may be positioning themselves ahead of the May Milk Production report to be released Friday afternoon. I estimate milk production to be down 0.3% from a year ago with cow numbers to be down 2,000 head from April. The butter price during spot trading increased a penny closing at $3.09 with seven loads traded. Grade A nonfat dry milk slipped 0.25 cent, closing at $1.2050 with two loads traded. Class IV futures have not yet been traded. Butter futures are 0.75 cent lower to 1.15 cents higher. Dry whey futures are steady to 1.35 cents lower.

Friday Morning Dairy Market Update - May Milk Production Report Arrives Today

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	3 to 5 Higher
Soybean Meal Futures:	$2 to $4 Higher
Wheat Futures:	3 to 4 Higher

MILK:

Milk futures may trade mixed ahead of spot trading as traders will be uncertain about price direction. Class III milk futures increased despite further weakness of underlying cash. Futures were adjusting due to the sharp decline during the previous days. Futures and cash should be aligned and will react to underlying cash. The May Milk Production report will be released Friday afternoon. I estimate milk production to be 0.3% below a year ago and cow numbers to be down 2,000 head from April. Traders will react to the report as this report has increased in importance. The report was previously used as a guide to the trend, but now it has become more important for current price movement.

CHEESE:

Cheese buyers may remain cautious and wait to see if sellers need to move more supply at reduced prices. If sellers offer at higher prices, or not at all, buyers may be more aggressive and bid higher to obtain the cheese. There is little concern over cheese supply with manufacturing running on full schedules.

BUTTER:

Buyers and sellers are comfortable at the current price level. Retail demand is improving, but there is sufficient supply for that demand. Churning will slow as the cream supply tightens. Inventory is higher than a year ago reducing concern over a tight supply. The butter price is expected to be choppy.

Thursday Closing Dairy Market Update - The Northeast Allowing Temporary Milk Dumping

MILK

Class III milk futures rebounded after being oversold on Tuesday. Underlying cash prices showed further weakness, but the rebound from the lows during spot trading also helped provide support. We have seen this numerous times during a trading period and it does not indicate that the market will turn higher. It just showed buyers were willing to purchase at the lows. Milk production is variable in the Northeastern region with overall levels higher than expected for this time of year. The Northeast Federal Milk Marketing Order is allowing the temporary discarding of milk through July 7. This is a surprise as milk production in the country has been below a year ago. The reason indicated is that Class I demand has been lighter than expected.

The June Monthly Milk Production report will be released on Friday. I estimate milk production to be down 0.3% from the previous year. I estimate cow numbers to be down 2,000 head from the previous month. The market will move based on the numbers even though the report will be history and not expectations. The April report resulted in a significant market reaction.

AVERAGE CLASS III PRICES

3 Month:	$20.17
6 Month:	$20.14
9 Month:	$19.76
12 Month:	$19.51

CHEESE

Though cheese prices show weakness, cheese demand holds strong in much of the country. It is uncertain how much demand will improve in the future. Cheese buyers have been purchasing for later demand but have not been consistently aggressive. The lower prices are expected to increase buyer interest. Plenty of milk remains available as spot milk prices are $1.50 to $2.00 below class.

BUTTER

Churning has been active, but most believe cream supplies will tighten soon. Some extra supply is expected to be available around the Independence Day holiday but should tighten seasonally during July. Manufacturers have been actively building inventory. The May Cold Storage report to be released on Tuesday will show whether inventory has increased since April.

OUTSIDE MARKETS SUMMARY

July corn closed down 10.25 cents per bushel at $4.3975, July soybeans closed down 18.75 cents at $11.5525 and July soybean meal closed down $7.00 per ton at $357.60. July Chicago wheat closed down 9.25 cents at $5.7275. August live cattle closed up $0.45 at $182.55. August crude oil is up $0.59 per barrel at $81.30. The Dow Jones Industrial Average is up 300 points at 39,135 while the NASDAQ is down 141 points at 17,722.

Thursday Midday Dairy Market Summary - Cheese Shows Further Losses

OUTSIDE MARKETS SUMMARY:

CORN:	9 Lower
SOYBEANS:	15 Lower
SOYBEAN MEAL:	$5.60 Lower
LIVE CATTLE:	$0.47 Higher
DOW JONES:	282 Points Higher
NASDAQ:	155 Points Lower
CRUDE OIL:	$1.49 Lower

MIDDAY MARKET UPDATE:

Block cheese declined by 0.75 cent, closing at $1.8525 with 13 loads traded. The price initially declined to $1.8450 before buying brought off the low. Barrel cheese price declined a penny to close at $1.93 with seven loads traded. Price initially declined to $1.9250 before buying bounced it off the lows. There were three unfilled bids for blocks and one uncovered offer remaining with four unfilled bids for barrels with one uncovered offer at the close. The dry whey price remained unchanged at 48 cents with no loads traded. Class III futures are steady to 33 cents higher. The butter price declined 2.75 cents, closing at $3.08 with three loads traded. Grade A nonfat dry milk price increased 1.75 cents, closing at $1.2075 with one load traded. This offset some of the pressure on Class IV futures from the lower butter price. Class IV futures have only traded in the July contract with a price 9 cents higher. Butter futures are 0.50 cent lower to 0.47 cent higher. Dry whey futures are 0.25 cent lower to 0.35 cent higher. 

Fluid Milk and Cream - Western U.S. Report 25

In California, milk production is trending weaker. Handlers convey week-to-week differences are more pronounced. Some stakeholders convey current milk output is slightly below anticipated volumes. Some handlers report preliminary records indicate June 2024 yearover-year milk production is down. Industry participants note cooler evening temperatures are giving some relief to the impacts of triple digit daytime temperatures on farm level milk output. Spot milk availability is tight. Stakeholders indicate most spot milk loads in the state are due to unplanned downtime. Class I demand is steady. Demands for Class II, III, and IV, are stronger, especially for Class III milk. 

Milk production in Arizona is seasonally weaker. Spot milk load availability is tighter. Class I demand is steady. All other Class demands are strengthening. 

Farm level milk output in New Mexico is weaker. Although availability of spot milk continues to tighten, milk volumes are generally meeting processing needs. All Class demands are steady. 

In the Pacific Northwest, handlers report steady or lighter farm level milk output. Stakeholders indicate spot milk load availability is ample for processing needs. All Class manufacturing demands are steady. 

Milk production in the mountain states of Idaho, Utah, and Colorado varies from steady to lighter. Handlers in Idaho indicate spring flush has been less pronounced in 2024 thus far. Stakeholders convey spot milk load availability has been tighter due to equipment breakdowns causing some milk handling challenges. Class I, II, and IV demands are steady. Class III demand is stronger. 

Cream demand and volumes are in line with the prior week. Cream multiples are unchanged. Industry participants report condensed skim demand and availability are comparable to recent weeks.

Thursday Morning Dairy Market Update - Milk Futures May Correct

OPENING CALLS:

Class III Milk Futures:	8 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	2 to 4 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	5 to 7 Lower

MILK:

Class III milk futures may have been overdone to the downside with prices likely to correct as traders cover short positions and buy in anticipation of a rebound. Milk production is running along seasonal levels as hot weather impacts output and components. However, milk is available for bottling and manufacturing without any shortages noted. Spot milk continues to run slightly below class, indicating sufficient supplies. The June contract is mostly set and will adjust based on prices released on the weekly AMS reports. Milk prices for June will be much improved over the May prices. The May Milk Production report will be released on Friday.

CHEESE:

Cheese prices may have declined sufficiently to generate buying interest from end users. However, buyers may not be aggressive as they see sufficient supplies available. Cheese production has been keeping up with demand, keeping inventory from exceeding last year's levels. This puts the market in a better position to see inventory decrease through the year's second half.

BUTTER:

The butter price has been chopping around the past few days as buyers and sellers are comfortable at the current price. The market is supported as demand improves both domestically and internationally. Tightening cream supplies may support the market as butter production declines. Inventories are higher than a year ago but at comfortable levels.

Tuesday Closing Dairy Market Update - GDT Trade-weighted Average Declined By 0.5%

MILK

The past three days have been brutal for nearby Class III futures. The July contract fell $1.38 over the past 3 days with futures closing at the lowest level since May 28^th. Later contracts suffered losses but not to the same extent. Class IV futures have held up better as butter and nonfat dry milk prices have not seen the selling pressure as cheese has. The volatility seen over the past weeks would suggest prices could rebound just as quickly as they fell.

The Global Dairy Trade auction took place today with the trade-weighted average down 0.5% from the previous event. There were 159 bidders with 16,787 metric tons sold. Anhydrous milk fat price declined 1.2% to $7,317 per metric ton or $3.32 per pound. Butter jumped 6.2% to $7,350 per metric ton or $3.33 per pound. Cheddar cheese declined 1.0% to $4,205 per metric ton or $1.91 per pound. Lactose increased 1.9% to $801 per metric ton or $0.36 per pound. Skim milk powder increased by 0.7% to $2,766 per metric ton or $1.25 per pound. Whole milk powder decreased by 2.5% to $3,394 per metric ton or $1.54 per pound. Buttermilk powder and Mozzarella cheese were not offered. The dairy markets will be closed on Wednesday.

AVERAGE CLASS III PRICES

3 Month:	$20.00
6 Month:	$19.96
9 Month:	$19.62
12 Month:	$19.38

CHEESE

The buyers of cheese were not very interested today. It was anticipated they would step up more aggressively due to the recent price weakness, but today was not the day. The magnitude of the weakness was a surprise. The current cheese supply is sufficient for demand with more milk available for manufacturing. The current supply is meeting demand without inventory increasing. Inventory could decrease rapidly for the rest of the year if international demand remains robust and domestic demand improves.

BUTTER

Butter price is holding support. It is not running higher as supply and demand are somewhat balanced. The market is supported and may see further strength as butter production slows for the summer. Manufacturers have been making butter and freezing it to satisfy demand later in the year. They were working to build an inventory to secure sufficient supply for the higher demand period.

OUTSIDE MARKETS SUMMARY

July corn closed up 6.25 cents per bushel at $4.5000, July soybeans closed up 16.25 cents at $11.7400 and July soybean meal closed up $4.30 per ton at $364.60. July Chicago wheat closed down 9.50 cents at $5.8200. August live cattle closed down $0.70 at $182.10. August crude oil is up $0.99 per barrel at $80.71. The Dow Jones Industrial Average is up 57 points at 38,835 with the NASDAQ up 5 points at 17,862.

Tuesday Midday Dairy Market Summary - Cheese Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	6 Higher
SOYBEANS:	14 Higher
SOYBEAN MEAL:	$3.70 Higher
LIVE CATTLE:	$0.17 Lower
DOW JONES:	16 Points Higher
NASDAQ:	20 Points Lower
CRUDE OIL:	$0.58 Higher

MIDDAY MARKET UPDATE:

Block cheese price fell 5.50 cents, closing at $1.86 with six loads traded. Barrel cheese price fell 6.00 cents, closing at $1.94 with three loads traded. An offer for a load of blocks remained at the close of spot trading. It was a bit surprising buyers did not step up aggressively at the lower prices of Monday. This weakness may keep buyers holding back until sellers no longer sell at lower prices. The dry whey price remained unchanged at 48 cents with no loads traded. Class III futures are 63 cents lower to 5 cents higher with July taking the brunt of the selling. Butter price remained unchanged at $3.1075 with no loads traded. The Grade A nonfat dry milk price declined by 0.25 cents, closing at $1.19 with three loads traded. Class IV futures have not yet been traded. Butter futures are 0.90 to 4.47 cents lower. Dry whey futures are 0.25 cent lower to 0.15 cent higher.

Tuesday Morning Dairy Market Update - Milk Futures Drift Lower Overnight

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	2 to 4 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	Mixed

MILK:

Class III milk futures have been under substantial pressure over the past two days due to the weakness of cheese prices. The market fundamentals are neutral with milk production holding or beginning to decrease seasonally. Milk production has been running below a year ago but may move closer in line with last year as milk prices increase. Farms will reduce culling and will try to improve milk output. Hot weather will impact milk production, but farms have done a good job by improving cooling for their herds. Milk futures will remain volatile as underlying cash will fluctuate as buyers and sellers accomplish business.

CHEESE:

Cheese prices have declined over the past few days, moving prices low enough to increase buyer interest. The trend is higher, but not without volatility. More milk is moving to processing, but that is not expected to overwhelm the market. International demand is strong and domestic demand is slowly improving.

BUTTER:

Retail butter demand is improving, which should begin to reduce inventory during the second half of the year. The increase in butter exports in April indicates better international demand. The Global Dairy Trade auction may show stronger butter prices adding to the support currently under the market.

Monday Closing Dairy Market Update - Sufficient Supply Keeps Pressure on Prices

MILK

Traders anticipated further weakness in cheese prices today. Class III futures were lower before spot trading and remained under pressure during and after trading. The July contract has declined nearly $0.75 per cwt over the past two trading days. This puts it down to the lowest close since June 7. Cheese buyers will buy at the lows and sellers will sell at higher prices. The overall trend is slightly higher, but the way will be volatile. Milk production is steady or slowing as summer weather becomes more prominent. Culling is anticipated to slow as the outlook for milk prices rises.

Higher milk prices will also soften the blow of increasing heifer prices and keep barns filled. Spot milk remains at a discount of $1.00 to $2.00 under class. This will change as we move through the summer and the milk supply tightens.

AVERAGE CLASS III PRICES

3 Month:	$20.31
6 Month:	$20.14
9 Month:	$19.71
12 Month:	$19.47

CHEESE

The weakness of cheese the past two days has hit Class III futures hard. Cheese prices are not expected to see much downside price potential as lower prices will increase buyer interest. The cheese supply is sufficient for current demand, but buyers will look to increase ownership on price weakness. Even though more milk is moving to manufacturing inventory is not expected to increase and should decrease during the second half of the year.

BUTTER

There is a strong chance that the price will move to recent highs and possibly exceed that level. Butter demand is improving at the retail level. Cream supply will be tightening as production will slow due to greater demand for cream from ice cream and other Class II products. If cream prices increase, some plants may sell some cream rather than churn it.

OUTSIDE MARKETS SUMMARY

July corn closed down 6.25 cents per bushel at $4.4375, July soybeans closed down 22.00 cents at $11.5775 and July soybean meal closed down $8.10 per ton at $360.30. July Chicago wheat closed down 21.25 cents at $5.9150. August live cattle closed down $0.38 at $182.80. July crude oil is up $2.21 per barrel at $80.66. The Dow Jones Industrial Average is up 189 points at 38,778 with the NASDAQ is up 168 points at 17,857.

Monday Midday Dairy Market Summary - Cheese Shows Further Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	6 Lower
SOYBEANS:	18 Lower
SOYBEAN MEAL:	$8.10 Lower
LIVE CATTLE:	$0.17 Higher
DOW JONES:	146 Points Higher
NASDAQ:	162 Points Higher
CRUDE OIL:	$1.44 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined by 5.50 cents, closing at $1.9150 with four loads traded. The barrel cheese price declined 2 cents, closing at $2.00 with seven loads traded. There was an unfilled bid and an uncovered offer for a load of blocks remaining and an unfilled bid for a load of barrels. The dry whey price increased a penny closing at 48 cents with one load traded. Class III futures were lower before spot trading and showed further losses during and after the trading period. Futures are currently steady to 33 cents lower. The butter price increased 1.75 cents, closing at $3.1075 with 2 loads traded. Nonfat dry milk remained unchanged at $1.1925 with no loads traded. Class IV futures have not yet traded with bids and offers far apart. Butter futures are mixed from 0.50 cent lower to 0.12 cent higher. Dry whey futures are 0.60-1.25 cents higher.