OVERVIEW:
Class III futures were lower throughout much of Tuesday but came under further pressure after USDA released the June Milk Production report. June milk production was 3.3% higher than June 2024 in the country. Cow numbers were 4,000 head more than May. This is a bearish report.
MILK:
Milk futures were under pressure throughout Tuesday with traders not liking the steady cheese prices and the decline of dry whey. Traders do not feel the need to buy futures for the long term. Increased selling pressure was put on futures after the release of the bearish June Milk Production report. Milk production in the top 24 states totaled 18.5 billion pounds, up 3.4% from June 2024. USDA revised May milk production up 0.7% to an increase of 2.4% compared to what was reported last month. That is a huge revision and makes the increase of 3.4% in June that much more bearish. Milk production per cow totaled 2,045 pounds, up 33 pounds from June 2024. Cow numbers increased by 3,000 head from May, totaling 9.03 million head. U.S. milk production increased 3.3% from a year earlier, totaling 19.233 billion pounds. Milk production per cow was 33 pounds higher than a year earlier at 2,031 pounds. Cow numbers increased by 4,000 head from May, totaling 9.469 million heads. April through June milk production was 2.4% above the same period a year ago. There were only three of the top 24 states that showed a milk production decline. Those states were Washington with a decline of 9.4%, Oregon was down 1.9%, and Pennsylvania was down 0.2%.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.44 |
| 6 Month: | $17.86 |
| 9 Month: | $17.87 |
| 12 Month: | $17.91 |
CHEESE:
It may not have been that cheese prices remained steady again Tuesday that was bearish in the market, but the fact that prices were not able to increase. The weakness of dry whey added to the negativity. With milk production increasing to the extent that it is, cheese prices will have a difficult time moving much higher.
BUTTER:
The weakness of butter recently seems to have been a forerunner of the bearish June Milk Production report. There is plenty of milk available for manufacturing. There had been reports that milk receipts had been decreasing, and there was some concern for tighter milk supplies. That is not the case, with milk production increasing rather than decreasing. Cream supplies have declined, but there is sufficient product for needs.
OUTSIDE MARKETS SUMMARY:
December corn closed down 4.50 cents per bushel at $4.1750, November soybeans closed unchanged at $10.2600 and December soybean meal closed up $2.10 per ton at $286.90. September Chicago wheat closed up 7.25 cents at $5.4950. August live cattle closed down $0.32 at $224.90. September crude oil is down $0.50 per barrel at $65.45. The Dow Jones Industrial Average is up 179 points at 44,502, with the NASDAQ down 81 points at 20,893.
