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.
