MILK
It was a rather quiet day in milk futures. Class IV contracts did not trade with the minor change in underlying cash prices showing little reason for prices to move. Class III futures were lower until closer to spot trading and increased due to the increase in cheese prices. The current level of milk production supports the market and should maintain strong milk prices. The concern is the level of demand that will surface as the year progresses. The current demand is good and should improve seasonally. Buyers of butter and cheese have not stepped up aggressively to increase ownership in preparation for Fall and holiday demand. Some of this may be due to some supply already on hand with current milk production sufficient for bottling and manufacturing. Schools will reopen in a few weeks with fluid milk plants increasing bottling to supply school accounts. This will reduce the volume of milk available for manufacturing and could tighten supply at a time when demand improves.
Tuesday is the last day to trade July futures and options with the Federal Order prices to be announced on Wednesday. The corn crop is 68% in good/excellent condition compared to 55% a year ago. The soybean crop is in 67% good/excellent condition compared to 52% a year ago.
AVERAGE CLASS III PRICES
| 3 Month: | $20.59 |
| 6 Month: | $20.58 |
| 9 Month: | $19.97 |
| 12 Month: | $19.54 |
CHEESE
There was concern cheese prices could slip during spot trading, but buyers were more aggressively looking for cheese. This could be the trend as the calendar moves to August and seasonal buying increases from packagers and recutters as they prepare for the holidays. Cheese prices have yet to break out of the trend and move higher. Until then traders will be cautious over the upside price potential.
BUTTER
The butter price was expected to trend higher due to the strength seen since the beginning of the year. However, the price has stabilized recently in a sideways pattern with buyers and sellers comfortable with supply. Higher inventory and steady churning leave sufficient butter available to the market.
OUTSIDE MARKETS SUMMARY
December corn closed up 2.25 cents per bushel at $4.1225, November soybeans closed down 9.00 cents at $10.3950 and December soybean meal closed down $1.20 per ton at $323.50. September Chicago wheat closed up 7.50 cents at $5.3100. October live cattle closed down $1.75 at $186.80. September crude oil is down $1.24 per barrel at $75.92. The Dow Jones Industrial Average is down 48 points at 40,540 with the NASDAQ up 12 points at 17,370.
