MILK
Class III milk futures fell substantially over the second half of the week with the September contract down about $1.30 and the October contract down about $0.80. These contracts fell substantially below $21.00. The underlying spot cheese prices declined as buyers stepped back on initial weakness followed by sellers wanting to move cheese resulting in lower prices. The decrease in milk output due to summer weather and overall lower milk production has not been enough to cause any significant tightness of supply or concern over future supply. This may change depending on the level of demand that will be seen for the rest of the year. There is concern over milk prices for the rest of the year as milk generally follows the direction of the corn price and the outlook for corn prices does not look very promising through the rest of the year. The other factor is that culling has slowed, which could increase cow numbers through the end of the year. USDA will release the June Dairy Products report on Monday.
AVERAGE CLASS III PRICES
| 3 Month: | $20.45 |
| 6 Month: | $19.97 |
| 9 Month: | $19.47 |
| 12 Month: | $19.21 |
CHEESE
For the week, blocks fell 8 cents with four loads traded. Barrels fell 4 cents with four loads traded. Buyers stepped back on the weakness that surfaced on Wednesday with sellers wanting to move cheese. This triggered heavy liquidation in Class III futures. The dry price was able to hold a 4-cent gain with five loads traded. The price reached a multi-year high during the week.
BUTTER
For the week, butter increased by 1.50 cents with 39 loads traded. Buyers and sellers were aggressive with limited price movement indicating a balanced market. Grade A nonfat dry milk gained 0.75 cent with 25 loads traded. There is sufficient supply for demand, keeping the price in a range.
OUTSIDE MARKETS SUMMARY
December corn closed up 4.75 cents per bushel at $4.0325, November soybeans closed up 10.75 cents at $10.2725 and December soybean meal closed up $8.40 per ton at $324.60. September Chicago wheat closed up 7.00 cents at $5.3900. October live cattle closed down $1.65 at $182.08. September crude oil is down $2.22 per barrel at $74.09. The Dow Jones Industrial Average is down 611 points at 39,737 with the NASDAQ down 418 points at 16,776.
