MILK:
Traders have been cautiously covering short positions or are buying into the market. Class III milk futures increased but were not able to hold the highs of the day. The July contract moved above $17.00. The volume of block cheese traded this week might indicate that buyers see the current price is at a level where they are willing to purchase what is offered. The recent hot weather has impacted milk production, but it remains strong overall. Sufficient milk is available for demand. Spot milk prices in the Central region show Class III milk ranging from $8.00 under class to flat class. That is a wide price variation and one that has been seen for a few weeks. Generally, spot milk prices do not have that wide of a variation. Milk output in the West is declining, but manufacturers indicate they have sufficient supply available from patrons and the spot market.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.85 |
| 6 Month: | $18.19 |
| 9 Month: | $18.13 |
| 12 Month: | $18.09 |
CHEESE:
Buyers have been more active in the spot market for block cheese. The low price and seasonal buying interest may have spurred the activity. Cheese supplies are sufficient for demand, but buyers will look ahead to increased demand later in the year. It is too early to determine the level of demand that will surface, which may keep buyer interest somewhat subdued. If substantial cheese buying takes place due to low prices, it may limit the upside potential later this year as buyers will be holding more inventory.
BUTTER:
The cream supply remains sufficient for demand, but supply is decreasing due to the hot weather experienced in many areas. International demand remains strong as the U.S. price is about $1.00 below the world price. Domestic demand is steady to lighter. The butter is moving in a sideways pattern as buyers and sellers are comfortable with the current price.
Outside Markets Summary:
July corn closed down .75 cent per bushel at $4.0950, November soybeans closed down 2.00 cents at $10.1650 and July soybean meal closed down $5.10 per ton at $270.90. September Chicago wheat closed down 7.75 cents at $5.3675. August live cattle closed up $0.23 at $209.20. August crude oil is up $0.30 per barrel at $65.22. The Dow Jones Industrial Average is up 404 points at 43,387, with the NASDAQ up 194 points at 20,168.
