OVERVIEW:
It was another day of weakness for milk futures. Spot butter and cheese prices came under further pressure. The Global Dairy Trade auction increased 1.1% from the previous event.
MILK:
There seems to be no bottom to Class III futures with new lows again today. Spot prices remain under pressure, leaving milk futures in a downtrend. The August Class III contracts moved below July, leaving the market in a bearish grip. Class IV futures showed little trading activity as traders remain uncertain whether the butter price will decline much further. The Global Dairy Trade auction trade-weighted average increased 1.1% compared to the previous event. There were 24,290 metric tons sold at an average price of $4,380 per metric ton. Anhydrous milk fat increased 0.8% to $6,973 per metric ton or $3.16 per pound. Butter remained steady with the previous event at $7,492 per metric ton or $3.40 per pound. Cheddar cheese declined 5.6% to $4,589 per metric ton or $2.08 per pound. Lactose declined 1.5% to $1,355 per metric ton or $0.61 per pound. Skim milk powder increased by 2.5% to $2,785 per metric ton or $1.26 per pound. Whole milk powder gained 1.7% to $3,928 per metric ton or $1.78 per pound. Mozzarella declined 0.7% to $4,760 per metric ton or $2.16 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.54 |
| 6 Month: | $17.99 |
| 9 Month: | $17.94 |
| 12 Month: | $17.96 |
CHEESE:
The block cheese price is now within 3 cents of the previous low established on June 24. Buyers usually turn somewhat aggressive at this time of year as they look forward to the increase in demand later in the year. However, that pattern may be different this year as buyers continue to purchase cheese without having to chase the market higher.
BUTTER:
The butter price has declined to the lowest level it has been since June 26. Domestic demand is steady, with sufficient supply readily available. International demand remains strong. The global price of butter has increased dramatically and is close to historic levels. This is directly impacting the baking, pastry, and processed food industries in multiple countries, where this key ingredient is becoming increasingly expensive and scarce. There appear to be no signs of relief anytime soon. Global prices are expected to remain high due to the persistence of supply restrictions and continued demand from many countries.
OUTSIDE MARKETS SUMMARY:
December corn closed up 1.75 cents per bushel at $4.1975, November soybeans closed down 5.25 cents at $10.0175 and December soybean meal closed down $2.20 per ton at $279.50. September Chicago wheat closed down 3.50 cents at $5.3800. August live cattle closed up $3.05 at $222.40. August crude oil is down $0.16 per barrel at $66.82. The Dow Jones Industrial Average is down 436 points at 44,023, with the NASDAQ up 37 points at 20,678.
