OVERVIEW:
Class III futures closed mixed, while Class IV contracts showed no trading activity throughout the day. The June Livestock Slaughter report showed slaughter declining from May but slightly higher than a year ago.
MILK:
Class III milk futures did not have a good week, making new contract lows before finding minor support at the end. The few days of steady cheese prices were thought to be the low for a while, but it was only a pause in a bearish market. Class III futures in the fourth quarter are the only contracts remaining above $18.00. The bi-annual Cattle Inventory report was released and showed dairy cattle inventory 1% above July 2023, totaling 9.45 million head. This is the highest inventory of milk cows for the July inventory report since July 1995 and the highest milk cow inventory number for the bi-annual report since the same year. Milk replacement heifers totaled 3.50 million head, unchanged from July 2023. The percentage of heifers to milk cows is 37%. This is the lowest percentage of heifers to milk cows since 1993, when I began recording it. It is not surprising to see a lower ratio, but it is surprising to see that the number of replacement heifers remained steady with two years ago. Heifer prices have increased substantially over the past two years. This is considered a bearish report.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.35 |
| 6 Month: | $17.77 |
| 9 Month: | $17.77 |
| 12 Month: | $17.82 |
CHEESE:
For the week, blocks decreased 0.25 cent with nine loads traded. The weekly average price is $1.6425. Barrels decreased 3.50 cents with seven loads traded. The weekly average price is $1.6530. Dry whey decreased by 1.75 cents with 13 loads traded. The weekly average price is 54.25 cents. American cheese inventory declined by 2.6 million pounds for May, totaling 805.1 million pounds. Inventory is slightly higher than in June 2024. Swiss cheese inventory increased by 199,000 pounds from May, totaling 23.0 million pounds and 3% above a year ago. Other cheese inventories increased 5.0 million pounds from the previous month, totaling 584.1 million pounds. This is 2% below that of a year ago. Total cheese inventory increased to 1.412 billion pounds and 2.6 million pounds above May and slightly below June 2024.
BUTTER:
For the week, butter decreased 4.75 cents with 14 loads traded. Grade A nonfat dry milk decreased 0.25 cent with 21 loads traded. Butter inventory in June was 10.2 million pounds below May, totaling 354.5 million pounds. This was 6% below June 2024. This is considered neutral to the market.
OUTSIDE MARKETS SUMMARY:
December corn closed down 1.75 cents per bushel at $4.1900, November soybeans closed down 3.25 cents at $10.2100 and December soybean meal closed down $1.50 per ton at $281.60. September Chicago wheat closed down 3.25 cents at $5.3825. October live cattle closed up $1.00 at $223.15. September crude oil is down $0.87 per barrel at $65.16. The Dow Jones Industrial Average is up 208 points at 44,902, with the NASDAQ up 50 points at 21,108.
