MILK
It has been a good week for Class III futures with new contract highs in all months. Strong underlying cash prices supported futures with most of the gain seen in the barrel price. The September contract is mostly priced and will see limited price movement as the movement of spot prices will not have much impact on it. The tightening milk supply has increased the desire of buyers to purchase cheese and butter for filling contracts and for expected demand through the rest of the year. Milk production seems to have reached its low for the year and will slowly improve. The lower cow numbers will impact the gain in milk production seen during the rest of the year. Class IV milk futures were higher in most months but did not make new contract highs in all contracts this week. The butter price was the limiting factor for Class IV futures.
AVERAGE CLASS III PRICES
| 3 Month: | $23.53 |
| 6 Month: | $22.22 |
| 9 Month: | $21.21 |
| 12 Month: | $20.73 |
CHEESE
For the week, blocks increased by 0.50 cent with nine loads traded. Barrels jumped 21 cents with only three loads traded. Dry whey increased by 1.75 cents with nine loads traded. The strength of barrels pushed milk futures higher and widened the block/barrel spread to an inverted 21 cents The spread closed last week at an inversion of 0.50 cent. Barrels were in demand with buyers aggressive and limited loads offered for sale. The barrel price is at the highest level it has been since November 5, 2020.
BUTTER
For the week, butter declined 4.50 cents with 12 loads traded. Grade A nonfat dry milk gained 2.75 cents with 31 loads traded. We can clearly see where the demand was this week as buyers aggressively purchased nonfat dry milk.
OUTSIDE MARKETS SUMMARY
December corn closed up 7.25 cents per bushel at $4.1325, November soybeans closed down 4.50 cents at $10.0625 and December soybean meal closed down $.30 per ton at $322.90. December Chicago wheat closed up 16.25 cents at $5.9475. October live cattle closed down $0.38 at $177.65. October crude oil is down $0.32 per barrel at $68.65. The Dow Jones Industrial Average is up 297 points at 31,394 with the NASDAQ up 114 points at 17,684.
