MILK:
Most of the country reports the spring flush is at or past its peak. That does not mean that milk production will fall back, but that production may stabilize. Hot summer weather will impact milk output as usual. However, it does not have the impact it once had due to the great strides made in cooling cows. Butterfat is showing signs of decreasing, which may tighten the butterfat supply as ice cream production ramps up. Higher volumes of milk are moving to manufacturing, but that is not expected to overwhelm plants. Class III futures diverged with contracts through October, closing lower, while later contracts were slightly higher. Class IV traders were uncertain of market strength, opting to mostly remain out of the market, with mixed futures ending the day.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.29 |
| 6 Month: | $19.43 |
| 9 Month: | $19.22 |
| 12 Month: | $18.97 |
CHEESE:
Retail demand for cheese is improving, which may be one reason for the recent increase in spot cheese prices. Growth in demand may be limited due to the high prices of many food items, resulting in increased food bills. Consumers will balance purchases, limiting the purchase of some items. Cheese supplies are sufficient for demand. Supply is not tight, nor is it expected to tighten significantly anytime soon. Stocks are lower than a year ago but have been increasing so far this year, but not enough to exceed the levels of last year.
BUTTER:
Most manufacturers continue to run at full capacity as the cream supply remains abundant. However, ice cream production is pulling more cream from the market. Summer weather is expected to reduce butterfat and reduce the abundant supply of cream. This may reduce the heavy supply but may not tighten the supply substantially. There have been 19 loads of butter traded on the CME spot market over the past two days.
OUTSIDE MARKETS SUMMARY:
July corn closed down 8.50 cents per bushel at $4.5100, July soybeans closed down 14.00 cents at $10.4850 and July soybean meal closed down $2.60 per ton at $293.70. July Chicago wheat closed up 1.75 cents at $5.3025. August live cattle closed down $1.13 at $208.18. July crude oil is up $0.99 per barrel at $61.88. The Dow Jones Industrial Average is down 245 points at 42,099, with the NASDAQ down 98 points at 19,101.
