MILK
Class III milk futures were lower ahead of spot trading but turned higher after cheese prices increased. Cheese stocks are lower than a year ago, but buyers are not concerned over supply. Lower prices increase buyer interest as they increase ownership for aging programs for demand later in the year. The demand for fresh cheese has not increased sufficiently to cause buyers to feel the need to purchase cheese and outbid each other to obtain it.
There is much anticipation that the milk supply will tighten as the year progresses. The hot weather has had an impact on cow comfort and reduced milk production to some extent. This is seasonal and will tighten supply if demand improves. There is sufficient milk at present to satisfy the needs of bottlers and manufacturers. Spot milk prices range as much as $1.00 over class as the supply tightens. Manufacturers look for extra milk supply rather than receiving calls from plants needing extra milk. The hopes of a Farm Bill this year are fading with it likely not to be passed before the presidential election.
AVERAGE CLASS III PRICES
| 3 Month: | $19.99 |
| 6 Month: | $19.98 |
| 9 Month: | $19.51 |
| 12 Month: | $19.22 |
CHEESE
Spot cheese prices continue to move up and down daily. Traders try to anticipate price direction but have not been successful recently. The anticipation seems to be that price increases or declines might last longer than a day or two, but that has not been the case. Cheese production schedules are mixed depending on the region. The U.S. City Average Retail natural cheese price in June was $5.54 per pound compared to $5.55 in May and $5.68 per pound a year ago. The average processed cheese price in June was $4.94 per pound compared to $4.82 in May and $4.70 per pound a year ago.
BUTTER
Churning is slowing as the cream supply tightens. This may provide greater support to the market in the upcoming weeks. Butter buyers have been increasing ownership on price weakness to prepare for upcoming demand. Inventory will be used to supplement production to meet demand.
OUTSIDE MARKETS SUMMARY
December corn closed up 4.50 cents per bushel at $4.0875, November soybeans closed up 3.25 cents at $10.4325 and December soybean meal closed up $1.80 per ton at $310.10. September Chicago wheat closed down 1.75 cents at $5.3075. August live cattle closed up $0.55 at $182.68. August crude oil is down $1.15 per barrel at $80.76. The Dow Jones Industrial Average is up 743 points at 40,954 with the NASDAQ up 37 points at 18,509.
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