MILK
Class III milk futures quickly fell back on the weakness of cheese prices. Traders were quick to liquidate positions rather than hold to see whether the weakness with be temporary. Futures may have been overdone to the downside, but that will depend on whether price will hold tomorrow or see further weakness. The July Federal Order prices were announced today. The Class II price is $21.82, up $0.22 from June and $2.70 per cwt higher than July 2023. The Class III price is $19.79, down $0.08 from June and $6.02 per cwt from a year ago. The Class IV price is $21.31, up $0.23 from June and $3.05 per cwt higher than June 2023.
USDA released the June Agricultural Prices report which contains average prices for most agricultural products. The average corn price was $4.48 per bushel, down $0.03 from May and compares to $6.29 per bushel in June 2023. The premium/supreme hay price was $256.00 per ton, down $20.00 per ton from May and compares to $310.00 per ton a year ago. The All-milk price was $22.80, up $0.80 per cwt from May and up $5.00 per cwt from June 2023. These prices are used in the calculation of the income over feed price for the Dairy Margin Coverage program. The soybean meal price is not in this report and will be released by the FSA. Once that is released, the income over feed price will be known. There will be no DMC payment as the decrease in feed prices and the increase of the milk price will improve the income over feed resulting in no payment.
AVERAGE CLASS III PRICES
| 3 Month: | $20.92 |
| 6 Month: | $20.38 |
| 9 Month: | $19.77 |
| 12 Month: | $19.43 |
CHEESE
Demand for cheese is steady, but some weakness has been noted from the food service industry. This may be temporary but is a cause for caution over the price potential for cheese. Spot milk prices have increased slightly with the current range from class to $2.00 over class. Manufacturers are having to go out and look for extra milk rather than receiving calls to take extra milk. This does not indicate the market is tightening and cheese production is declining. It does increase the concern over the possibility of the potential for tighter supply as the year progresses.
BUTTER
The strength in butter price over the past two days does not indicate a change in the market. It solidifies that the market will remain in a sideways trading range for the near term. Food service demand has been a bit slow but is expected to improve over the next few months.
OUTSIDE MARKETS SUMMARY
December corn closed down 5.25 cents per bushel at $3.9975, November soybeans closed up 1.25 cents at $10.2250 and December soybean meal closed down $2.30 per ton at $315.70. September Chicago wheat closed up 3.25 cents at $5.2725. October live cattle closed down $0.78 at $186.68. September crude oil is up $3.18 per barrel at $77.91. The Dow Jones Industrial Average is up 99 points at 40,843 with the NASDAQ is up 452 points at 17,599.
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