OVERVIEW:
Class III milk futures did not improve ahead of the close. With little direction from the underlying cash, there is no reason for traders to turn bullish on the market. USDA will release the June Milk Production report on Tuesday.
MILK:
It may be very difficult for traders to turn bullish on this market. The current fundamentals do not suggest strength in milk prices anytime soon. We should see seasonal buying in the underlying cash markets, as buyers look ahead to second-half demand. However, there is little reason to be concerned over supplies at the current time. Milk production was above last year for the first five months of the year, and the June Milk Production report is expected to show continued gains over last year. I estimate June milk production to be 1.5% above June 2024. Cow numbers are expected to have increased, with my estimate at 3,000 head more than May. Milk replacement prices remain high, and farmers hang onto cows. The corn crop continues to do well with 74% of the crop in good/excellent condition compared to 67% last year. Soybeans are 68% good/excellent and the same as a year ago.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.71 |
| 6 Month: | $18.08 |
| 9 Month: | $18.03 |
| 12 Month: | $18.03 |
CHEESE:
There was buying interest for block cheese during spot trading, but the interest was at lower prices. The recent activity in the spot market gives the impression that buyers and sellers are comfortable at the current price level. Demand remains steady and has not been improving as it should be at this time of year. Cheese supplies remain plentiful.
BUTTER:
The butter price has been in a downtrend and has been unable to find support. The price was anticipated to increase through the summer as buyers purchased for the upcoming fall demand. However, that has not developed with buyers having already purchased a supply of butter ahead of time. There have been some weeks during which over 100 loads of butter had changed hands in the spot market.
OUTSIDE MARKETS SUMMARY:
December corn closed down 5.50 cents per bushel at $4.2225, November soybeans closed down 9.75 cents at $10.2600 and December soybean meal closed down $4.00 per ton at $284.80. September Chicago wheat closed down 4.00 cents at $5.4225. August live cattle closed up $1.68 at $225.23. September crude oil is down .31 per barrel at $65.74. The Dow Jones Industrial Average is down 19.12 points at 44,323.07 and NASDAQ is up 78.51 points at 20,974.17.
