MILK
Milk futures showed losses in most contracts. Class III futures were under significant pressure before spot trading but shed some pressure when spot cheese prices held steady. However, most contracts remained under pressure into the close. The surprise was the weakness of Class IV futures despite higher butter and nonfat dry milk spot prices. The August Federal Order class prices were released showing gains in all classes. The Class II price was $22.05, up $0.23 from July and up $2.14 from August 2023. The Class III price was $20.66, up $0.87 from the previous month and up $3.47 from a year earlier. The Class IV price was $21.58, up $0.27 from July and up $2.67 from August 2023.
The Global Dairy Trade Auction took place on Tuesday. The trade-weighted average declined 0.4% from the previous event. There were 38,346 metric tons sold during the auction. Anhydrous milk fat increased 0.7% to $7,311 per metric ton or $3.32 per pound. Butter decreased 0.9% to $6,675 per metric ton or $3.03 per pound. Buttermilk powder jumped 8.4% to $3,024 per metric ton or $1.37 per pound. Cheddar cheese increased 0.9% to $4,324 per metric ton or $1.96 per pound. Lactose fell 8.9% to $863 per metric ton or $0.39 per pound. Mozzarella jumped 7.0% to $5,145 per metric ton or $2.33 per pound. Skim milk powder increased 4.5% to $2,756 per metric ton or $1.25 per pound. Whole milk powder decreased by 2.5% to $3,396 per metric ton or $1.54 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $22.70 |
| 6 Month: | $21.67 |
| 9 Month: | $20.82 |
| 12 Month: | $20.42 |
CHEESE
Cheese demand is increasing for certain varieties as buyers look ahead to fall and holiday demand. Prices have been supported due to inventory running 6% below a year ago. Inventory did not increase seasonally during the first half of the year. Buyers are not afraid of a shortage of cheese at present but are concerned that stocks may decrease more rapidly than usual, reducing stocks further through the end of the year. This should continue to support the market for the time being.
BUTTER
The butter price declined to a level at which buyers were willing to step up to purchase more aggressively. The price should remain supported and may reach back to the previous high. Churning is active as cream supplies are loosening somewhat. However, fresh production will be insufficient to meet demand, and inventory will be needed to supplement production.
OUTSIDE MARKETS SUMMARY
December corn closed down 2.00 cents per bushel at $4.1075, November soybeans closed up 2.00 cents at $10.2350 and December soybean meal closed down $2.80 per ton at $326.50. December Chicago wheat closed down 6.00 cents at $5.7475. October live cattle closed down $1.98 at $177.25. October crude oil is down $0.05 per barrel at $69.15. The Dow Jones Industrial Average is down 219 points at 40,756 with the NASDAQ up 43 points at 17,128.
