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.
