OVERVIEW:
Both Class III and Class IV futures showed some nice gains in response to stronger cheese and butter prices. The June Cold Storage report did not show any significant change in inventory or trend. There was good buying interest under the market, but only one buyer was willing to bid higher to obtain a load of cheese.
MILK:
It was good to see some strength in milk futures after the bearish milk production report on the neutral cold storage report. Buyers will be cautious about upside price potential as the market fundamentals have not turned bullish. If anything, they have become more bearish as milk production, cow numbers, and milk per cow continue to improve. It would be nice to see better fundamentals in the market, but with demand as it is and supply as it is, there is little to provide any concern in the market. The bi-annual Cattle Inventory report released on Friday showed a record low heifer-to-milk cow ratio compared to July 2023. However, cow numbers have increased over the past two years despite a declining heifer supply.
AVERAGE CLASS III PRICES:
| 3 Month: | $18.50 |
| 6 Month: | $17.89 |
| 9 Month: | $17.85 |
| 12 Month: | $17.87 |
CHEESE:
The strength in the block cheese price was the result of a buyer being more aggressive and likely needing to obtain a load of cheese to fill orders. There were nine unfilled bids below the market, but those buyers were not willing to bid higher to obtain any cheese. Only one seller showed up to do business, but more might have offered cheese if the price had increased.
BUTTER:
The butter price has had a nice rebound, which might be limited due to steady to lighter retail demand and lower demand from the food service industry than a year ago. It may be difficult for butter to remain the losses it has had over the past two weeks, but a further retracement is possible.
OUTSIDE MARKETS SUMMARY:
December corn closed down 5.00 cents per bushel at $4.1400, November soybeans closed down 9.50 cents at $10.1150 and December soybean meal closed down $2.30 per ton at $279.30. September Chicago wheat closed up .25 cent at $5.3850. October live cattle closed up $1.63 at $224.78. September crude oil is up $1.83 per barrel at $66.99. The Dow Jones Industrial Average is down 64 points at 44,838, with the NASDAQ up 70 points at 21,179.
