MILK
Class III futures responded to the strength of cheese prices by moving the limit up in the September and October contracts. Both contracts close above $22.00 and new contract highs. If September futures hold, it will be the highest Class III price since July 2022. This contract is now beginning to be priced but remains wide open for price movement relative to underlying spot prices. Futures contracts in 2025 showed little reaction to the jump in spot prices closing mixed for the day. The concern over tightening milk production and diverting more milk to bottling to fill the demand for school systems has gained traction causing cheese buyers to be more aggressive. Cheese buyers have turned more aggressive and are trying to outbid each other in their attempt to procure cheese before prices increase. September through November Class III contracts have moved to prices similar to those of Class IV futures. This has improved the outlook for milk prices immensely. Grain prices are showing continued weakness as the crop is expected to be large and ending stocks plentiful.
AVERAGE CLASS III PRICES
| 3 Month: | $21.67 |
| 6 Month: | $21.01 |
| 9 Month: | $20.17 |
| 12 Month: | $19.75 |
CHEESE
The block cheese price moved to the highest level since March 27, 2023. The barrel cheese price moved to the highest level since October 6, 2022. If the barrel price increases further, it will move to the level last seen in June 2022. Buyers are stepping up to purchase cheese before prices increase resulting in a leapfrog effect as buyers attempt to outbid each other. Interestingly, those who came to the spot market went home satisfied as no unfilled bids or uncovered offers remained at the close of spot trading.
BUTTER
The aggressive buying interest in the spot market was met with a plentiful butter supply. The volume of 51 loads is the highest amount traded in one day. The amount of butter available to the market will limit the upside price potential in the near term. The price increase despite the high trading volume indicates strong support in the market.
OUTSIDE MARKETS SUMMARY
December corn closed down 3.75 cents per bushel at $3.9700, November soybeans closed steady at $9.6850 and December soybean meal closed up $4.00 per ton at $307.70. September Chicago wheat closed down 6.50 cents at $5.2825. October live cattle closed down $1.38 at $180.75. September crude oil is up $1.18 per barrel at $78.16. The Dow Jones Industrial Average is up 555 points at 40,553 with the NASDAQ up 402 points at 17,595.
