MILK:
The July and August Class III futures contracts moved to new highs with July closing above $20.00 at $20.16. Class IV futures are a long way from new highs, but futures increased substantially. The bullish cold storage report has offset the bearishness of the milk production report. Seasonal buying has kicked in, with buyers stepping up more aggressively to purchase before prices increase further. This improves the outlook for milk prices immensely and will keep milk production strong unless something unforeseen happens. The income over feed price should improve significantly if the trend continues. The corn crop condition is rated at 68% good/excellent, with 87% planted. This is a strong start to the growing season and may keep corn prices low.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.46 |
| 6 Month: | $19.53 |
| 9 Month: | $19.26 |
| 12 Month: | $19.00 |
CHEESE:
Buyers became aggressive after the extended weekend with the intent of increasing their ownership of supplies. Cheese inventory is not catching up with year-earlier supplies, indicating demand is holding well and is providing a positive outlook for prices.
Dry whey has moved to the highest level since February 18, providing substantial support to the Class III complex. The strength may bring more buyers into the market as they will want to purchase before prices increase. However, this will push prices higher as buyers may leapfrog over each other to purchase what is offered.
BUTTER:
Butter may make up for lost time as the price may have remained lower longer than it should have. Buyers have not been aggressive for three months, anticipating that the butter supply would remain large due to strong output from abundant cream supplies. The butter output has been strong, but it has been unable to keep the supply above the level of a year ago, according to the cold storage report.
OUTSIDE MARKETS SUMMARY:
July corn closed steady at $4.5950, July soybeans closed up 2.25 cents at $10.6250 and July soybean meal closed up $.10 per ton at $296.30. July Chicago wheat closed down 14.00 cents at $5.2850. August live cattle closed down $1.15 at $209.30. July crude oil is down $0.64 per barrel at $60.89. The Dow Jones Industrial Average is up 741 points at 42,344, with the NASDAQ up 462 points at 19,199.
