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.
