OVERVIEW:
Class III milk futures have nowhere to go. Sellers continue to bring supply to the spot market, limiting the upward price potential. The USDA will release the World Agricultural Supply and Demand Estimates report on Friday.
MILK:
It is interesting to see how the market can change quickly as far as the supply of milk is concerned. Some manufacturing plants in the Central region report they are short of milk and are having difficulty finding spot milk to maintain full production schedules. Just a few weeks ago, spot milk prices were as much as $8.00 below class with plants running on full schedules. That changed as the hot weather impacted cow comfort and milk receipts declined at the plant level. The Western region is reporting lower milk production, but not as severe as many had anticipated. Farms have improved their cooling systems, not only in the West but nationwide. The Class III milk futures were under pressure due to the decline in cheese prices. The trading volume was rather light. Class IV futures did not trade the entire day. USDA will release the World Agricultural Supply and Demand report on Friday. The report will provide the USDA's estimates for milk production, milk prices, and dairy product prices for this year and 2026.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.88 |
| 6 Month: | $18.30 |
| 9 Month: | $18.20 |
| 12 Month: | $18.16 |
CHEESE:
Even though milk supplies to manufacturers have slowed, there is sufficient cheese available to the market. Demand has not improved to the level at which the supply is not keeping up with demand. Food service demand continues to lag compared to previous years. There is little reason for prices to increase, which is keeping end users unconcerned over the availability of supplies.
BUTTER:
It is uncertain whether the price may move higher to exceed the previous high set earlier this week, or if the buying today was just to fill immediate demand. It seems as if the price might stair-step higher as the summer progresses, but likely not move with the magnitude that it has in other years.
OUTSIDE MARKETS SUMMARY:
December corn closed up 1.00 cent per bushel at $4.1650, November soybeans closed up 6.50 cents at $10.1375 and December soybean meal closed up $2.40 per ton at $285.30. September Chicago wheat closed up 7.50 cents at $5.5450. August live cattle closed down $0.55 at $219.23. August crude oil is down $1.81 per barrel at $66.57. The Dow Jones Industrial Average is up 192 points at 44,651, with the NASDAQ up/down 19 points at 20,631.
