It was a positive day for Class III futures with the August contract reaching limit up at one point. Traders had a substantial change in attitude after cheese prices increased for the 3rd consecutive day. This strength may bring more buyers into the market as they believe price increases will continue next week. Higher milk production and the potential for production to remain above a year ago throughout the rest of the year may limit the upside potential. Rabobank forecasts a strong second half of the year. Demand generally increases in the second half of the year, and exports are expected to remain strong. The industry is not expecting a lack of milk supply, but it is anticipating an increase in demand.
AVERAGE CLASS III PRICES:| 3 Month: | $18.26 |
| 6 Month: | $18.56 |
| 9 Month: | $18.41 |
| 12 Month: | $18.31 |
For the week, blocks declined by 4.50 cents, with 70 loads traded. The weekly average price was $1.6170. Barrels gained 0.75 cent, with 13 loads traded. The weekly average price was $1.6405. Dry whey gained 1.50 cents, with 10 loads traded. It was a surprise to see traders buy futures as aggressively as they had today. Mixed spot cheese prices for the week would not suggest the strength today. However, three consecutive days of gains turned traders bullish for the near term.
BUTTER:For the week, butter gained 6.25 cents, with 15 loads traded. The weekly average price was $2.5360. Grade A nonfat dry milk declined a penny, with two loads traded. The weekly average price was $1.2520. The butter price has been in a sideways range for the past month. The expectation is for the price to resume the uptrend as the summer progresses and demand improves.
Outside Markets Summary:July corn closed up 8.00 cents per bushel at $4.1750, November soybeans closed up 8.25 cents at $10.2475 and July soybean meal closed up $.20 per ton at $271.10. September Chicago wheat closed up 4.00 cents at $5.4075. August live cattle closed up $4.10 at $213.30. August crude oil is up $0.28 per barrel at $65.52. The Dow Jones Industrial Average is up 432 points at 43,819, with the NASDAQ up 106 points at 20,273.
