MILK
Class III milk futures increased even though cheese prices held steady. That seemed to provide traders with confidence that prices would increase. More schools are opening which requires more milk for bottling for school accounts. There is no shortage of milk, but supplies are tightening with spot prices increasing. This is seasonal but is receiving more attention due to milk production below a year ago. USDA will release the July Milk Production report on Wednesday. The report is expected to show output below the previous year. Summer weather has impacted cow comfort and affected production per cow. Cow numbers remain below a year ago but may hold or increase as the year progresses. The corn crop is rated at 67% good/excellent condition with the soybean crop rated at 68% good/excellent condition.
AVERAGE CLASS III PRICES
| 3 Month: | $21.78 |
| 6 Month: | $21.08 |
| 9 Month: | $20.24 |
| 12 Month: | $19.81 |
CHEESE
Spot cheese prices held steady but only sellers showed up during the spot trading period and were unwilling to reduce their offers. That may indicate buyers need to step up and pay more money to purchase supplies. The supply of fresh cheese may be tightening leaving a reduced supply available for the spot market. Cheese futures have an extra price premium included in the September and October futures contracts.
BUTTER
There is strong buying interest in the butter market. International demand has improved with domestic demand likely to increase over the next months. Cream supplies have tightened but may be more available in another month allowing for increased butter output.
OUTSIDE MARKETS SUMMARY
December corn closed up 7.75 cents per bushel at $4.0025, November soybeans closed up 19.00 cents at $9.7600 and December soybean meal closed up $8.40 per ton at $310.50. September Chicago wheat closed down 1.75 cents at $5.2825. October live cattle closed up $0.73 at $179.03. October crude oil is down $1.88 per barrel at $73.66. The Dow Jones Industrial Average is up 237 points at 40,897 with the NASDAQ up 245 points at 17,877.
