Friday Closing Dairy Market Update - Milk Futures Have Good Week, Feed Prices Decline

MILK

Milk futures came to life this week with contracts increasing substantially despite some price weakness during the week. Traders have turned extremely bullish and rightly so as underlying cash prices showed strength. Buyers have stepped up to purchase seasonally and because of the potential for tightening supplies. Milk production continues to decline seasonally while at the same time demand for fluid milk for the school systems increases. Milk is moving to deficit areas to satisfy the demand. The decrease in milk production may slow as temperatures cool next month but production may not increase significantly for a while.

The July Agricultural Prices report released by the USDA shows a decrease in all feed prices used to calculate income over feed for the Dairy Margin Coverage program. The average corn price was $4.24 per bushel compared to $4.48 per bushel in June and $6.22 in July 2023. The premium/supreme hay price was $237.00 per ton in July compared to $256.00 in June and $288.00 per ton in July 2023. The All-milk price was $22.80 in July, the same price as in June. This compares to $17.30 in July 2023. The average soybean meal price is not in this report but will be released on Tuesday. Other prices to take note of are the average soybean price for July was $11.30, down $0.50 per bushel from June and compared to $14.70 per bushel in July 2023. The alfalfa hay price was $183.00 per ton compared to $195.00 for June and $246.00 per ton a year ago. The average price for a dairy cow in July was $2,360.00 compared to $1,760.00 in July 2023.

AVERAGE CLASS III PRICES

3 Month:	$21.95
6 Month:	$21.78
9 Month:	$21.00
12 Month:	$20.51

CHEESE

For the week, blocks increased by 17.25 cents with 16 loads traded. Barrels increased by 16 cents with five loads traded. Dry whey declined by 0.25 cent with nine loads traded. Blocks moved to the highest price since November 18, 2022. Cheese supply is sufficient for demand, but buyers are concerned about the potential for lower output and reduced availability of fresh cheese.

BUTTER

For the week, the butter price increased by 4 cents with 42 loads changing hands. Grade A nonfat dry milk increased by 4.75 cents with 40 loads changing hands. The butter price moved to a new high during spot trading but could not hold the gain falling back. It may take another run at that level next week. The Grade A nonfat dry milk price moved to the highest level since December 30, 2022.

OUTSIDE MARKETS SUMMARY

December corn closed up 5.00 cents per bushel at $4.0100, November soybeans closed up 7.50 cents at $10.0000 and December soybean meal closed up $2.10 per ton at $313.00. December Chicago wheat closed up 2.75 cents at $5.5150. October live cattle closed up $0.70 at $178.60. October crude oil is down 2.36 per barrel at $73.55. The Dow Jones Industrial Average is up 228 points at 41,563 with the NASDAQ up 197 points at 17,714.

Friday Midday Dairy Market Summary - Block Cheese Moves to Multiple Year High

OUTSIDE MARKETS SUMMARY:

CORN:	6 Higher
SOYBEANS:	8 Higher
SOYBEAN MEAL:	$3.30 Higher
LIVE CATTLE:	$1.90 Higher
DOW JONES:	74 Points Lower
NASDAQ:	55 Points Higher
CRUDE OIL:	$2.14 Lower

MIDDAY MARKET UPDATE:

The block cheese price jumped 13.50 cents clsoign at $2.21 with three loads traded. This is the highest price since November 18, 2022. The barrel cheese price jumped 8.75 cents closing at $2.26 with two loads traded. There were unfilled bids for two loads of blocks and one load of barrels. The dry whey price remained unchanged at 56 cents with no loads traded. Class III futures are unchanged to 30 cents higher with traders more aggressive in the first quarter of 2025. The butter price remained unchanged at $3.17 with 26 loads traded. The price initially moved to $3.20 before falling back Grade A nonfat dry milk gained 2 cents closing at $1.33 with five loads traded. Class IV futures are 1 to 34 cents higher. Butter futures are 0.37 cent lower to 2.00 cents higher. Dry whey futures are steady to 0.75 cent lower. USDA will release the July Agricultural Prices report this afternoon.

Friday Morning Dairy Market Update - Dairy Traders Hold Upward Bias

OPENING CALLS:

Class III Milk Futures:	4 to 8 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	6 to 8 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	1 to 2 Lower

MILK:

Milk futures continue to be supported by the strength of underlying cash. Cheese prices have been more volatile than butter. Class IV futures continue to hold at higher prices with most contracts higher than Class III. The downside price potential for both cash and futures may be limited. This is the time of year when buyers are generally more aggressive as they look ahead to and prepare for increased demand. USDA will release the July Agricultural Prices report this afternoon. Most of the prices used in calculating income over feed for the Dairy Margin Coverage program will be contained in the report. The average soybean meal price is not on that report and may not be released until next week. Income over feed is expected to be around $12.00 due to the increased All-milk price and lower feed prices. The markets will be closed on Monday in observance of Labor Day and will reopen Monday night.

CHEESE:

The inability of block cheese to hold the gains during spot trading on Thursday will leave traders cautious today. However, prices are not expected to weaken much, if at all. Buyers are willing to buy on weakness rather than holding back anticipating further weakness.

BUTTER:

The butter price will continue to chop around but remain supported. The price is expected to reach the high of 2022 but may fall short of a record high this year. Both international and domestic demand is improving. Inventory is supplementing fresh production to meet demand.

Thursday Closing Dairy Market Update - Milk Futures Find Strong Support

MILK

The outlook for milk prices continues to improve as reduced milk production and the time of year have increased the optimism for price potential. Traders have turned their attention to futures contracts later in the year and the first quarter of 2025 reducing some of the discounts that had been prevalent. Futures still retain a seasonal discount, but stronger prices are expected. Class III and Class IV futures are closely priced for the next few months, but Class IV futures hold a significant premium to Class III in 2025. Lower grain prices generally have an impact on milk production and milk prices. There are other factors prevalent that may delay that correlation in the foreseeable future. A tight heifer market is having an impact on the physical and psychological aspects of the market. Farmers culling fewer cows will leave older and lower-producing cows in the herds. That gives the impression milk production will be lower even if more cows remain in the national herd. That may impact the production and availability of milk for bottling and manufacturing. Improving demand should support prices. The USDA will release the July Agricultural Prices report on Friday providing the average price used to calculate income over feed.

AVERAGE CLASS III PRICES

3 Month:	$21.84
6 Month:	$21.61
9 Month:	$20.80
12 Month:	$20.34

CHEESE

The supply/demand balance is shifting a little to a tighter supply. This has resulted in a growing bullish attitude in the market. Even though the block cheese price did not hold initial gains during spot trading and barrels regained only about a third of yesterday's losses, milk futures posted significant gains. Milk flowing to the cheese vat is reduced and expected to remain that way for the foreseeable future.

BUTTER

Bulk butter production in the West is steady with cream readily available. Demand is slowly improving across the country as buyers increase ownership to supply previously made contracts and build supply for upcoming demand. There is a sufficient supply of inventory, but prices may continue to trend higher as demand may reduce inventory more than usual.

OUTSIDE MARKETS SUMMARY

December corn closed up 5.25 cents per bushel at $3.9600, November soybeans closed up 15.50 cents at $9.9250 and December soybean meal closed up $2.60 per ton at $310.90. December Chicago wheat closed up 7.25 cents at $5.4875. October live cattle closed down $0.73 at $177.90. October crude oil is up $1.39 per barrel at $75.91. The Dow Jones Industrial Average is up 244 points at 41,335 with the NASDAQ down 40 points at 17,516.

Thursday Midday Dairy Market Summary - Barrel Cheese Rebounds

OUTSIDE MARKETS SUMMARY:

CORN:	7 Higher
SOYBEANS:	16 Higher
SOYBEAN MEAL:	$1.50 Higher
LIVE CATTLE:	$0.67 Lower
DOW JONES:	446 Points Higher
NASDAQ:	160 Points Higher
CRUDE OIL:	$1.25 Higher

MIDDAY MARKET UPDATE:

Traders were optimistic cheese prices would increase Thursday. Class III futures were higher ahead of spot trading and solidified those gains after the trading period. The block cheese price remained unchanged at $2.0750 with five loads traded. The price initially increased to $2.10 before dropping back to unchanged. The barrel cheese price gained 4.75 cents closing at $2.1725 with one load traded. There were two unfilled bids for loads of blocks and one unfilled bid for barrels at the close. The dry whey price increased 0.75 cent, closing at 56 cents with no loads traded. Class III futures are 2 to 49 cents higher with January showing the greatest gain and a new contract high. The butter price declined 2.75 cents, closing at $3.17 with no loads traded. Grade A nonfat dry milk increased by 0.50 cent, closing at $1.31 with three loads traded. Class IV futures are 1 to 21 cents lower. Butter futures are 3.75 cents lower to 0.85 cent higher. Dry whey futures are 0.55 cent lower to 0.72 cent higher.

Fluid Milk and Cream - Western U.S. Report 35

Some contacts in California report year-over-year and monthly milk output upticks, but the overall supply situation remains somewhat snug. Summer heat is playing a notable role in parts of the Central Valley as cow comfort continues to improve in much of the Golden State. Spot milk availability for processors has been scant, due to the aforementioned seasonal conditions, plus the pull from bottlers as they replenish school pipelines. In the southwestern states, hot weather continues to keep milk solids near annual lows. 

Triple-digit temperatures are still a regular part of the forecast in Arizona. 

In New Mexico, although it has cooled some, days are still hitting the 90+ degree mark regularly. 

The Pacific Northwest remains an exception to the norm in the West. High temperatures in the 70s and cool nights have kept milk production steady in that area of the region. Milk solids are also reportedly in much better shape. 

Contacts in Idaho reported some cooler days have been intermittent, but they are expecting rebounds in farm milk output over the next few weeks with likely improvements in cow comfort. 

Condensed skim availability has been tighter since the beginning of the month, but demand tones are somewhat robust. Contacts say Class III and Class IV condensed skim end users are actively bidding. 

Throughout the region, cream availability has become somewhat less tight with the upcoming holiday playing a part. Cream handlers say finding homes for extra cream has not been impossible, but a little more difficult this week. There are expectations that cream will remain more available moving into and during week 36. 

Thursday Morning Dairy Market Update - Cash Market Volatility Expected

OPENING CALLS:

Class III Milk Futures:	5 to 10 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	7 to 9 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	3 to 5 Lower

MILK:

Milk futures showed weakness following the substantial decline in cheese prices Wednesday. However, the weakness was only confined to nearby contracts and futures did not decline as much as would have been expected. Traders held some optimism that the weakness would be short-lived. However, the overnight trading activity showed further weakness with some traders having second thoughts. The milk supply has been sufficient for demand with spot prices increasing. Schools close for the Labor Day weekend will leave more milk available to the spot market.

CHEESE:

It is unclear whether the weakness of cheese prices on Wednesday will be extended Thursday. Buyers generally step back on price weakness as they wait to see how aggressive sellers will be. That may not be the case as buyers may be more aggressive on any price weakness. It is possible cheese prices could rebound into the end of the week.

BUTTER:

The butter price may move to the high set in 2022 in the near term as buyer interest should improve over the next weeks. Inventory is higher than a year ago, but increasing domestic and international demand may reduce inventory more rapidly than usual. Buyers may be more aggressive Thursday.

Wednesday Closing Dairy Market Update - Milk Prices May Remain Supported

MILK

Milk futures retraced today but remained at good prices. Traders remain optimistic that there will be limited downside price potential. The time of year suggests higher prices will unfold as demand improves. Milk production continues to run lower than a year ago and may remain that way. Culling remains lower than a year ago with farms keeping cows in the herd. Although it may improve cow numbers or at least keep them from continuing to go lower, it may not improve milk production greatly. These may be lower producers and older cows that may not have the genetic potential of replacement heifers. That may limit the growth of milk production. It is uncertain whether demand will improve sufficiently to tighten the milk supply. Bottling for school accounts is absorbing substantial volumes of milk with less available for manufacturing. This is seasonal and not unexpected. Manufacturers had already prepared for this by increasing plant inventories for contracted orders. Spot milk in the Midwest is reported at prices ranging from $0.50 - $2.25 over class.

AVERAGE CLASS III PRICES

3 Month:	$21.72
6 Month:	$21.34
9 Month:	$20.54
12 Month:	$20.13

CHEESE

Manufacturers are reporting that higher cheese prices have not resulted in buyer resistance. Most indicated sufficient milk for cheese production with plants running on full schedules. The recent price swings in the spot market have been unprecedented leaving traders uncertain of the long-term price direction. However, the market may be supported by a continued upward bias.

BUTTER

Even though the butter supply is higher than a year ago, demand is expected to reduce inventory and move it closer to the level it was a year ago. World demand is improving, which may increase exports. Domestic demand shows signs of improvement as the fall and holiday season approaches. Price is expected to see continued support.

OUTSIDE MARKETS SUMMARY

December corn closed down 2.00 cents per bushel at $3.9075, November soybeans closed down 9.50 cents at $9.7700 and December soybean meal closed down $3.90 per ton at $308.30. December Chicago wheat closed up 6.00 cents at $5.4150. October live cattle closed down $0.78 at $178.63. October crude oil is down $1.01 per barrel at $74.52. The Dow Jones Industrial Average is down 159 points at 41,091 with the NASDAQ down 199 points at 17,556.

Wednesday Midday Dairy Market Summary - Cheese Prices Fall

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	11 Lower
SOYBEAN MEAL:	$5.60 Lower
LIVE CATTLE:	$1.17 Lower
DOW JONES:	255 Points Lower
NASDAQ:	225 Points Lower
CRUDE OIL:	$0.84 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined by 6.50 cents to close at $2.0750 with one load traded. The barrel cheese price fell 12.50 cents, closing at $2.1250 with one load traded. No unfilled bids for blocks remained with two loads offered at the close. Barrels had two unfilled bids and one uncovered offer remaining. The dry whey price declined 1.25 cents, closing at 55.25 cents with five loads traded. Class III futures are 40 cents lower to 16 cents higher. They are holding well, considering the large decline in cheese and the loss in dry whey. Traders seem to believe it will be temporary. The butter price remained unchanged at $3.1975 with no loads traded. Grade A nonfat dry milk declined a penny, closing at $1.3050 with five loads traded. Class IV futures are 17 to 22 cents lower. Butter futures are 0.92 cent lower to 0.22 cent higher. Dry whey futures are steady to 0.30 cent higher.

Wednesday Morning Dairy Market Update - Stronger Prices Expected in 2025

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	2 to 5 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENNG CALLS:

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

MILK:

The pressure on nearby Class III milk futures may be short-lived if cheese prices hold or increase Wednesday. Some selling pressure continued overnight as traders wanted to take advantage of the higher prices. There is a growing consensus that the milk supply may tighten and there could be further tightening of supply over the next few months. The futures market showed higher prices are expected in 2025 contracts, which was reflected in Tuesday's trade. Higher milk prices will be welcomed but may negatively impact demand over time. Farms will increase production if possible. However, replacements are high-priced and difficult to find. Feed prices will be reasonable this year as a large crop is projected to be harvested and prices continue to decline. This may keep more cows in the herd.

CHEESE:

Cheese prices seem to be supported with little downside expected if there is any weakness. Buyers are purchasing for upcoming contracted orders and potential fill-in demand over the next few months. Lower inventory and reduced cheese output due to mover milk moving to bottling will keep the milk supply limited and spot milk prices increasing.

BUTTER:

The butter price is only 7 cents from the high of 2022 and continues to move closer to the record high last year. Butter inventory is higher than a year ago, but the decline in inventory in July was significant and increases the potential for inventory to move closer to year-earlier levels. Further strength could be seen Wednesday.

Tuesday Closing Dairy Market Update - Fluid Milk Sales Decline

MILK

Nearby Class III futures showed quite a bit of volatility today with a large swing from high to low. The September contract had a high of $22.88 and a low of $22.42. October had a high of $23.40 and a low of $22.71. November had a high of $22.59 and a low of $22.04. These contracts closed lower on the day. The cheese prices remaining steady put pressure on the closer months. That may be short-lived if buyers continue to support the market. Class IV futures posted strong gains as the butter price moved above the previous high triggered aggressive buying with all contracts making new highs. June fluid milk sales totaled 3.2 billion pounds which was 2.9% below June 2023. Whole milk sales declined 2.4%; flavored whole milk declined 9.4%; reduced-fat milk sales declined 8.5%; low-fat milk declined 7.2%; fat-free declined 13.9%; flavored fat-reduced sales increased 0.4%; buttermilk declined 8.5% with other fluid milk sales up 56.1%. Organic whole milk sales increased by 4.6%; organic flavored whole milk jumped by 19.1%; organic reduced fat milk increased by 7.6%; organic low fat declined by 10.0%; organic fat-free declined by 6.4%; organic flavored fat-reduced sales increased by 47.1% with sales of other organic milk down 77.8%.

AVERAGE CLASS III PRICES

3 Month:	$21.98
6 Month:	$21.46
9 Month:	$20.63
12 Month:	$20.20

CHEESE

Cheese prices will unlikely decline much with the bias being for higher prices. However, the market is unpredictable and volatile with Fall and holiday demand driving prices. Cheese prices remained unchanged today leaving traders concerned over upside price potential, but they likely will continue to support the market.

BUTTER

This moves the price to a new high, the highest since October 31, 2023. It is now 7 cents below the high of 2022. Grade A nonfat dry milk increased 1.75 cents closing at $1.3150 with 13 loads traded. This is the highest nonfat price since January 3, 2023. The strength of butter seems to be on again and then off again, but it is possible record highs could be reached over the next few months. Trading activity remains strong.

OUTSIDE MARKETS SUMMARY

December corn closed up 6.25 cents per bushel at $3.9275, November soybeans closed up 5.75 cents at $9.8650 and December soybean meal closed up $4.00 per ton at $312.20. December Chicago wheat closed up 10.50 cents at $5.3550. October live cattle closed up $2.43 at $179.40. October crude oil is down $1.89 per barrel at $75.53. The Dow Jones Industrial Average is up 10 points at 41,251 with the NASDAQ up 29 points at 17,755.

Tuesday Midday Dairy Market Summary - Butter Price Reaches a New High

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$4.20 Higher
LIVE CATTLE:	$1.90 Higher
DOW JONES:	2 Points Lower
NASDAQ:	43 Points Higher
CRUDE OIL:	$1.91 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese prices remained steady with blocks at $2.14 and barrels at $2.25 with no loads traded in each. No buyers showed up during the spot trading period with two uncovered offers posted for barrels remaining at the close of trading. The dry whey price remained unchanged at 56.50 cents with two loads traded. Class III futures posted double-digit gains in many contracts ahead of spot trading and are now 20 cents lower to 35 cents higher. The highest gain is in the June contract with the lowest price in the October 2024 contract. The butter price increased 2.25 cents, closing at $3.1975 with 13 loads traded. This moves the price to a new high and the highest since Oct. 31, 2023. It is now 7 cents below the high of 2022. Grade A nonfat dry milk increased 1.75 cents to close at $1.3150 with 13 loads traded. This is the highest nonfat price since Jan. 3, 2023. Class IV futures are 13-60 cents higher. Butter futures are steady to 4 cents higher. Dry whey futures are steady to 1.50 cents higher.

Tuesday Morning Dairy Market Update - Buying Continued in Milk Futures Overnight

OPENING CALLS:

Class III Milk Futures:	6 to 10 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The outlook for milk prices for the rest of the year improved substantially on Monday as underlying cash prices rebounded. This pushed futures to new contract highs. Buyers of cheese and butter stepped up to purchase at the lower prices of last week, but their aggressive activity resulted in limited purchases but substantial price gains. The milk supply is decreasing seasonally, but there remains sufficient for demand. The friendly cold storage report increased the buying interest of end users as they saw inventory decline and stocks at a lower level than a year ago.

CHEESE:

The gains in barrels outpaced the increase in blocks, moving the spread to an inverted 11 cents. Buyers may now remain more aggressive as they look ahead to upcoming demand and the potential for lower inventory and further price strength. This could result in buyers trying to outbid each other.

BUTTER:

The butter price is expected to reach back to the previous high and exceed that level this week as demand shows signs of improving. Butter inventory remained 7% above a year ago on the cold storage report, but the decline for the month was higher than the average. The reduced churning pace and increasing demand may push the price higher in the coming weeks. 

Monday Closing Dairy Market Update - Limit Up Gains in Class III Dairy Contracts

MILK

It was an explosive high-volume day for Class III futures. The September and October contracts closed limit up with over 1,300 contracts traded in each. October moved above $23.00. The December contract is nearing $21.00 but could not quite reach that level due to futures being limited by the 75-cent daily trading limit. This was an about-face from Friday when buyers did not want to purchase even at the lower prices. The July Cold Storage report may have influenced the price strength. Inventory declined in July with cheese supplies 6% below a year ago. The reduced level of milk production and declining inventory may increase buying interest as the industry looks ahead to Fall and holiday demand. Manufacturing milk supplies have been reduced due to more milk moving to bottling for the school systems. Reduced manufacturing and lower inventory may keep buyers active as September unfolds.

AVERAGE CLASS III PRICES

3 Month:	$22.07
6 Month:	$21.49
9 Month:	$20.61
12 Month:	$20.14

CHEESE

Cheese buyers turned aggressive as they saw the July inventory report and wanted to take advantage of the price declines of last week. However, the market provided a limited opportunity to purchase at lower prices as not much activity took place with prices higher than before. There may be further buying on Tuesday, but price increases may temper the buying interest. The block price moved to the highest level since January 11, 2023.

BUTTER

Butter inventory in July was higher than a year ago, but buyers wanted to increase ownership in preparation for upcoming demand. The price is poised to move above last week's high as reduced churning may limit the amount of butter in inventory over the next few months.

OUTSIDE MARKETS SUMMARY

December corn closed down 4.50 cents per bushel at $3.8650, November soybeans closed up 7.75 cents at $9.8075 and December soybean meal closed up $3.70 per ton at $308.20. December Chicago wheat closed down 3.00 cents at $5.2500. October live cattle closed up $1.28 at $176.98. October crude oil is up $2.59 per barrel at $77.42. The Dow Jones Industrial Average is up 65 points at 41,241 with the NASDAQ down 152 points at 17,726.

Monday Midday Dairy Market Summary - Butter and Cheese Prices Jump

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$3.70 Higher
LIVE CATTLE:	$0.85 Lower
DOW JONES:	89 Points Higher
NASDAQ:	148 Points Lower
CRUDE OIL:	$2.32 Higher

MIDDAY MARKET UPDATE:

Block cheese price jumped 10.25 cents, closing at $2.14 with seven loads traded. The barrel cheese price jumped 15 cents, closing at $2.25 with one load traded. Buyers jumped in to take advantage of the lower prices last week but were unable to take much advantage of the drop due to the aggressive rebound. This sent the September, October, and November Class III futures limit up. The dry whey price remained unchanged at 56.50 cents with no loads traded. Class III futures are 1 cent lower to 75 cents higher. The only loss is in the nearby August contract It is mostly priced and will see limited movement until the Federal Order prices are announced next week. The butter price increased 4.50 cents, closing at $3.1750 with three loads traded. Grade A nonfat dry milk increased 1.50 cents, closing at $1.2975 with 14 loads traded. Class IV futures are 1 cent lower to 15 cents higher. Butter futures are 0.85 to 3.00 cents higher. Dry whey futures are unchanged to 0.55 cent higher.

Monday Morning Dairy Market Update - Lower Trade to Begin Week

OPENING CALLS:

Class III Milk Futures:	3 to 5 Lower
Class IV Milk Futures:	2 to 5 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	6 to 8 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	2 to 3 Lower

MILK:

Traders will be cautious ahead of the spot market. The large decline of barrel cheese Friday was unexpected, leaving traders wondering whether further weakness might unfold Monday. Milk production is below a year ago but sufficient milk remains available for manufacturing and bottling. The extra milk moving to supply the school systems has reduced the manufacturing supply but it has not caused a concern over a shortage. If the current level of milk production and the slow increase in cow numbers continue, there will be sufficient milk supplies for needs through the end of the year. This may limit the potential for higher milk prices. Traders will be cautious ahead of spot trading uncertain on underlying cash.

CHEESE:

The decline in cheese prices should make it more attractive for buyers to purchase for seasonal demand. However, they may wait to see how aggressive sellers will be. Lower cheese inventory should provide support. If demand improves, inventory could decline more quickly, which could support prices. Buyers have little concern over supply for now.

BUTTER:

Buyers are likely to step up to take advantage of the lower price. There have been a lot of loads traded on the spot market over the past two weeks. Buyers have been able to purchase a substantial supply for upcoming demand. The buyers have not had to be too aggressive as sellers were willing to move butter. Prices are good and the supply has been sufficient which may limit price strength in the near term. 

Friday Closing Dairy Market Update - July Dairy Inventory Declines

MILK

Class III milk futures began the week very strong but took a beating in the last half of the week. Some stability was seen today despite the large decline in the barrel cheese price. It seems traders do not feel underlying cash prices have much downside potential. The weakness of underlying cash prices today should have put more pressure on futures, but the July Cold Storage report may have limited to weakness. The bearish implications of the July Milk Production report may be tempered by the lower inventory for the month. Milk production may be near the seasonal low in the next few weeks. Cow comfort will improve with cooler weather. All schools will be in session over the next two weeks with milk moving to maintain the school pipeline for the rest of the school year.

AVERAGE CLASS III PRICES

3 Month:	$21.54
6 Month:	$20.89
9 Month:	$20.13
12 Month:	$19.76

CHEESE

For the week, blocks declined 6.25 cents with six loads traded. Barrels fell 15.50 cents with two loads traded. The strong buying interest of the past few weeks dried up quickly as the need for barrels was satisfied for the time being. Dry whey increased by 1.50 cents with two loads traded. American cheese inventory in July declined 7.4% totaling 794.1 million pounds. Stocks are 6% below July 2023. Swiss cheese inventory increased 29,000 pounds totaling 22.4 million pounds or 2% below a year ago. Other cheese inventory declined 2.8% to 590.5 million pounds and 6% below a year ago. Total cheese inventory reached 1.407 billion pounds. This decline was 10.2 million pounds lower than in June and was 6% below a year ago.

BUTTER

For the week, butter declined 5 cents with 54 loads traded. Nonfat dry milk gained 2.75 cents with 22 loads traded. Butter inventory in July fell by 23.0 million pounds totaling 353.8 million pounds. This was a decline of 6% from June but remains 7% above July 2023.

OUTSIDE MARKETS SUMMARY

December corn closed down 2.50 cents per bushel at $3.9100, November soybeans closed up 11.50 cents at $9.7300 and December soybean meal closed up $.40 per ton at $304.50. December Chicago wheat closed down 7.50 cents at $5.2800. October live cattle closed down $0.20 at $175.70. October crude oil is up $1.94 per barrel at $74.95. The Dow Jones Industrial Average is up 462 points at 41,175 with the NASDAQ up 258 points at 17,878.

Friday Midday Dairy Market Summary - Barrel Cheese Price Falls

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	10 Higher
SOYBEAN MEAL:	$0.50 Lower
LIVE CATTLE:	$0.02 Higher
DOW JONES:	296 Points Higher
NASDAQ:	175 Points Higher
CRUDE OIL:	$1.97 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 4 cents closing at $2.0375 with two loads traded. No bids or offers were remaining at the close. The barrel cheese price fell by 12.25 cents closing at $2.10 with no loads traded. There were two uncovered offers and one unfilled bid remaining at the close. The unfilled bid was posted a penny lower than the closing price. The dry whey price remained unchanged at 56.50 cents with no loads traded. Class III futures rejected the lower prices that unfolded during and after spot trading. Futures are 15 cents lower to 12 cents higher. The butter price declined 2 cents closing at $3.13 with 22 loads traded. Nonfat dry milk increased by 0.25 cent closing at $1.2825. Class IV futures are 14 cents lower to 54 cents higher. Contracts in 2025 are showing unusual strength. Butter futures are 1.100 cents lower to 1.65 cents higher. Dry whey futures are 015 cent lower to 0.25 cent higher. USDA will release the July Cold Storage report this afternoon.

Friday Morning Dairy Market Update - July Cold Storage Report Today

OPENING CALLS:

Class III Milk Futures:	4 to 10 Lower
Class IV Milk Futures:	2 to 5 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III milk futures took a beating Thursday with some follow-through selling overnight. The weakness of underlying cash may continue Friday as buyers in the cash market may hold back. The July Milk Production report was somewhat bearish, which may have influenced trading Thursday. USDA will release the July Cold Storage report Friday, which may also provide some influence on the market next week. Market fundamentals have seen little change this week and continue to follow seasonal lines. Increased milk volumes are moving to deficit areas to satisfy the demand for school accounts. Spot milk prices are increasing as the supply has tightened.

CHEESE:

Traders will focus on barrel trading Friday as the low bids on Thursday are a concern. Buyers showed no interest in purchasing barrels except about 20 cents lower. It is unusual to have a large gap between bids and the current market, which could suggest buyers may not be interested until that level. Buyers may hold back today to see how aggressive sellers might be.

BUTTER:

There continues to be a substantial volume of loads traded in the spot market. There is no shortage of butter but demand is sufficient to hold prices at the current level. The cream supply continues to tighten but there are adequate supplies for churning. Cream prices have been increasing as demand remains strong. The cold storage report is expected to show July butter inventory higher than a year ago.

Thursday Closing Dairy Market Update - Cattle Slaughter Holds Below a Year Ago

MILK

Class III milk futures came under substantial pressure as the weakness of cheese prices triggered heavy selling. The September contract fell below $22.00. The weakness does not indicate a top has been reached, but it may be difficult to regain the losses anytime soon. The market remains in an uptrend, but traders liquidated due to underlying cash weakness rather than holding on and waiting for prices to turn higher. Class IV futures held well despite the weakness of butter and nonfat dry milk. The next few months are generally a period of higher demand which should support the market. The milk production report showed 5,000 more cows in the nation's dairy herd compared to June. The July Livestock Slaughter report showed 225,9000 dairy cattle were slaughtered for the month. This was an increase of 39,500 head more than were slaughtered in June, but 18,300 head less than in July 2023. The low slaughter volume in June resulted from just fewer animals culled for the month. Those carried over into July bringing the volume near the average.

AVERAGE CLASS III PRICES

3 Month:	$21.57
6 Month:	$20.85
9 Month:	$20.09
12 Month:	$19.72

CHEESE

The barrel cheese price posted a large decline compared to blocks as sellers seemed to have sufficient supply. There may be further losses as the unfilled bids remaining at the close were substantially below the market. When there is a large void between the cash price and the nearest buy level, it can indicate the market will eventually go to that level before the market will find support. This may have added additional pressure to the market.

BUTTER

The butter price declined again as aggressive buying demand was filled. Lower prices should trigger further buying interest as demand shows signs of increasing. Churning remains active but slower than it had been. Spot cream prices have been improving due to a tighter supply. However, inventory is sufficient to cover any shortfall. USDA will release the July Cold Storage report on Friday showing the level of supplies.

OUTSIDE MARKETS SUMMARY

December corn closed down 4.75 cents per bushel at $3.9350, November soybeans closed down 20.00 cents at $9.6150 and December soybean meal closed down $4.60 per ton at $304.10. December Chicago wheat closed down 8.50 cents at $5.3550. October live cattle closed up $1.28 at $175.90. October crude oil is up $1.08 per barrel at $73.01. The Dow Jones Industrial Average is down 178 points at 40,713 with the NASDAQ down 300 points at 17,619.

Fluid Milk and Cream - Western U.S. Report 34

In California, milk production is seasonally weaker. However, some handlers indicate preliminary records suggest August 2024 milk output is up year-over-year compared to August 2023, above anticipated volumes, and strengthening compared to last month. Processors in the Central Valley convey milk volumes continue to be comfortable. Spot milk availability is in line with recent weeks. Class I demand is stronger as many educational institutions have started sessions back up. Class II, III and IV demands are steady. 

Farm level milk output is lighter in Arizona. Industry participants indicate tight spot milk availability has not eased. Class I demand is stronger with more educational facilities gearing up to start sessions. Demands for all other Classes are steady. 

In New Mexico, milk production and spot volumes are generally in accord with much of the southwest. All Class demands are unchanged. 

Handlers report milk production is steady and at anticipated volumes in the Pacific Northwest. Stakeholders suggest spot volumes for the area are looser than elsewhere in the region. All Class manufacturing demands are steady. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado varies from steady to slightly weaker. In Idaho, handlers convey lower daytime/nighttime temperatures later this week should improve milk output. Class I demand is stronger as many schools throughout the mountain states have begun sessions this week. Class II demand is stronger, particularly in Idaho, as some unexpected busier production runs have taken place recently. Class III demand is strengthening further. Spot sellers note sales of above Class III prices. Class IV demand is steady. 

Industry participants describe cream volumes for the West region mostly as comfortable and looser than other regions in the country. However, spot availability is not excessive either for most of the region. West region cream sellers convey some requests from Midwest buyers for loads have been turned down. Cream demand is steady. Cream multiples contracted slightly. Condensed skim milk loads are tighter. Condensed skim milk demand is stronger.  

Thursday Midday Dairy Market Summary - Class III Milk Futures Fall Apart

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	22 Lower
SOYBEAN MEAL:	$5.80 Lower
LIVE CATTLE:	$1.45 Higher
DOW JONES:	221 Points Lower
NASDAQ:	235 Points Lower
CRUDE OIL:	$1.35 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 1.75 cents, closing at $2.0775 with one load traded. Offers were remaining at the close of spot trading with no unfilled bids. The barrel cheese prices declined 6 cents, closing at $2.2225 with no loads traded. The concern is that the only bids posted were way down at $2.0175 and $2.0150. Many times when there are bids posted substantially lower than the market without any buyers between, prices eventually go to that level. Hopefully, that will not be the case. The dry whey price slipped 0.25 cent, closing at 56.50 cents with one load traded. Class III futures reached the 75-cent daily limit down as traders reacted to the lower spot prices and the bearish implication of the milk production report. The butter price declined a penny, closing at $3.15 with no loads traded. Only sellers showed up during spot trading. Grade A nonfat dry milk declined by 0.50 cents with eight loads traded. Class IV futures are steady to 6 cents higher. Butter futures are 4.05 cents lower to 0.95 cent higher. Dry whey futures are 1.25 cents lower to 1.25 cents higher.

Thursday Morning Dairy Market Update - Milk Futures May Show Weakness Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	3 to 5 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures may struggle ahead of spot trading as traders assess the longer-term implications of the milk production report. Increasing cow numbers and production per cow may move milk production above a year ago over the next months. Increased milk production will be needed if demand increases along seasonal levels. Higher milk prices will increase the desire for farms to limit culling and improve milk production. Heifer supplies are tight, but higher prices are not as difficult to pay when the outlook is for higher milk prices.

CHEESE:

Cheese prices may be near a threshold and why prices have been choppy and diverging. Barrels are in a tight supply position with better demand keeping the block/barrels spread inverted and wide. More milk is moving to deficit areas for school systems reducing milk for manufacturing. Spot milk prices are increasing as supply tightens. However, there is sufficient available to satisfy demand.

BUTTER:

Trading activity has increased significantly for butter with quite a few loads already traded during the spot trading period this week. This has not been bearish to the market but has limited upside price potential. Churning is active but not quite as strong as it had been.

Wednesday Closing Dairy Market Update - July Milk Production Down 0.4%

MILK

Traders remained optimistic despite mixed underlying cash prices. The much-awaited July Milk Production report was released and was not what the trade expected. July milk production was only down 0.2% from July 2023 in the top 24 states. This is the least year-over-year decrease we have seen so far in 2024. Milk production for June was revised downward showing a decline of 1.5% compared to a year earlier. This was 137 million pounds lower than the initial estimate last month. Milk production per cow averaged 2,047 pounds which was 2 pounds above July 2023. Cow numbers totaled 8.88 million head, 31,000 less than a year ago, but 3,000 more than in June. U.S. milk production declined 0.4% from a year ago. Milk production per cow was one pound higher than in July 2023. Cow numbers totaled 9.33 million head. This was 43,000 less than a year ago, but 5,000 more than in June. It was anticipated cow numbers might increase but this was a surprise. If this continues, milk production could exceed the previous year by the end of the year.

AVERAGE CLASS III PRICES

3 Month:	$21.98
6 Month:	$21.22
9 Month:	$20.34
12 Month:	$19.90

CHEESE

The milk supply has tightened but remains sufficient for demand. Spot milk prices have increased this week ranging from $2.25 to $3.00 over class. Spot prices are expected to increase in the coming weeks. Demand for cheese is termed as steady. Some in the industry feel there will be a limit to the upside price potential. Of course, that will depend on how demand unfolds as the year progresses. Barrel cheese remains in a tighter position than blocks and will keep the spread inverted.

BUTTER

Churning continues to remain active with plants pulling supplies from other areas to satisfy churning demand. Butter production seems to be keeping up with demand, with inventory above a year ago. USDA will release the July Cold Storage report on Friday providing an idea of the level of demand.

OUTSIDE MARKETS SUMMARY

December corn closed up 0.25 cent per bushel at $3.9825, November soybeans closed up 5.50 cents at $9.8150 and December soybean meal closed up $.40 per ton at $308.70. December Chicago wheat closed down 12.50 cents at $5.4400. October live cattle closed down $0.98 at $174.63. October crude oil is down $1.24 per barrel at $71.93. The Dow Jones Industrial Average is up 55 points at 40,890 with the NASDAQ up 102 points at 17,919.

 

July Milk Production in the United States down 0.4 Percent

July Milk Production down 0.2 Percent        

Milk production in the 24 major States during July totaled 18.2 billion pounds, down 0.2 percent from July 2023. June revised production, at 17.9 billion pounds, was down 1.5 percent from June 2023. The June revision represented a decrease of 137 million pounds or 0.8 percent from last month's preliminary production estimate.  Production per cow in the 24 major States averaged 2,047 pounds for July, 2 pounds above July 2023.   The number of milk cows on farms in the 24 major States was 8.88 million head, 31,000 head less than July 2023, but 3,000 head more than June 2024.   

July Milk Production in the United States down 0.4 Percent  

Milk production in the United States during July totaled 18.9 billion pounds, down 0.4 percent from July 2023.  Production per cow in the United States averaged 2,028 pounds for July, 1 pound above July 2023.  The number of milk cows on farms in the United States was 9.33 million head, 43,000 head less than July 2023, but 5,000 head more than June 2024. 

Wednesday Midday Dairy Market Summary - Spot Dairy Prices Mixed

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	3 Higher
SOYBEAN MEAL:	$0.50 Lower
LIVE CATTLE:	$0.15 Higher
DOW JONES:	30 Points Lower
NASDAQ:	62 Points Lower
CRUDE OIL:	$1.59 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped by 0.50 cent closing at $2.0950 with one load traded. The barrel cheese price gained 1.75 cents closing at $2.2825 with no loads traded. The inverted block/barrel spread widens to 18.75 cents. The dry whey price gained a penny closing at 56.75 cents with one load traded. Class III futures are 6 cents lower to 12 cents higher. The butter prices declined a penny closing at $3.16 with 16 loads traded. The price initially increased 2 cents before selling pressure intensified and the price was pushed lower. Grade A nonfat dry milk increased by 0.25 cent closing at $1.2850 with seven loads traded. Class IV futures are 1 to 18 cents higher. Butter futures are 2.00 cents lower to 3.75 cents higher. Dry whey futures are steady to 0.52 cent higher. USDA will release the July Milk Production report this afternoon. I estimate milk production to be down 1.1% below a year ago. I estimate cow numbers to be 2,000 higher than in June.

Wednesday Morning Dairy Market Update - July Milk Production Report to be Released 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:	4 to 6 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	1 to 3 Higher

MILK:

Milk futures should remain supported, but how much further they increase will be up to demand and buying interest in the spot market. Cheese buyers do not seem to want to bid higher for supply. However, reduced milk production and increased bottling demand for school systems may reduce availability and result in the necessity to pay higher prices. The seasonal decline in milk production due to weather may be at an end. However, milk output will not increase anytime soon and is expected to remain below a year ago through the rest of the year. USDA will release the June Milk Production report Wednesday afternoon. I estimate milk production to be 1.1% below a year ago. I estimate cow numbers to be up 2,000 head from June.

CHEESE:

Barrel cheese is in a tighter supply position than blocks, which should keep the barrel price higher. The demand for fresh cheese may increase as buyers look ahead to fall and holiday demand. This may keep them aggressive in the spot market as they want to increase ownership. Cheese prices are expected to remain supported unless demand does not improve as anticipated.

BUTTER:

The dip in the butter price Tuesday was a surprise but it does not change the trend. Butter is not in a tight supply as inventory is greater than a year ago. However, the price should remain supported and trend higher over the next few months. Churning has slowed due to a tighter cream supply. Inventory should decline during the rest of the year as stocks are used to supplement fresh production.

Tuesday Closing Dairy Market Update - New Contract Highs in Milk Futures

MILK

Traders are bullish on the market as some contracts continued to push higher despite little movement of the underlying cash prices. Reduced milk production has become a greater focus now that demand for school milk is high and cheese production is slowing. There is sufficient milk available for needs but the supply is not overabundant and spot milk prices are increasing. The level of demand will be the key to the upside price potential. Greater buying interest has developed, which may provide continued support to the market.

The Global Dairy Trade Auction showed the trade-weighted average up 5.5% from the previous event. There were 34,916 metric tons sold during the trading period. Anhydrous milk fat increased 4.8% to $7,244 per metric ton or $3.29 per pound. Butter increased 3.7% to $6,706 per metric ton or $3.04 per pound. Cheddar cheese slipped 0.2% to $4,274 per metric ton or $1.94 per pound. Lactose increased 2.7% to $945 per metric ton or $0.43 per pound. Mozzarella cheese increased 5.0% to $4,810 per metric ton or $2.18 per pound. Skim milk powder increased 4.0% to $2,636 per metric ton or $1.20 per pound. Whole milk powder increased 7.2% from the previous event to $3,482 per metric ton or $1.58 per pound. USDA will release the July Milk Production report on Wednesday. Milk production is expected to be below the level of last year. I estimate milk production to be down 1.1% below a year ago.

AVERAGE CLASS III PRICES

3 Month:	$21.90
6 Month:	$21.13
9 Month:	$20.26
12 Month:	$19.82

CHEESE

The block/barrel spread is at an inverted 16.50 cents. Much of the time over the past few years, barrels have been above blocks. Barrels are in a tighter supply position keeping buyers more aggressive. Cheese has strong support and prices should remain higher in the near term. The continued price strength may increase buying interest and push prices higher as buyers become concerned over higher prices. Traders begin to leapfrog over each other to purchase supplies.

BUTTER

It was a little surprising the price slipped today as buyers were expected to remain aggressive. Of course, the price will not increase consistently without price corrections. The butter supply is not tight keeping buyers from getting too aggressive. Inventory remains above a year ago.

OUTSIDE MARKETS SUMMARY

December corn closed down 2.25 cents per bushel at $3.9800, November soybeans closed steady at $9.7600 and December soybean meal closed down $2.20 per ton at $308.30. September Chicago wheat closed up 4.75 cents at $5.3300. October live cattle closed down $3.43 at $175.60. October crude oil is down $0.56 per barrel at $73.10. The Dow Jones Industrial Average is down 62 points at 40,835 with the NASDAQ down 60 points at 17,817.