OVERVIEW:
Class III futures were in a tug of war with initially stronger prices giving way to weakness, only to find strength later in the day. Class IV futures came under pressure due to the weakness of butter. The milk supply has decreased in some cases as the summer weather impacts cow comfort.
MILK:
Milk availability has decreased somewhat over the past week as summer weather impacts cow comfort and milk output. This has prompted some manufacturers to look for extra loads of spot milk. Spot milk prices have made a significant change, with prices in the Central region increasing to flat class to $2.00 over class. Two weeks ago, spot milk in the region was as much as $8.00 below class. The milk supply remains sufficient for demand, but not as plentiful as it has been. This is seasonal and not surprising or a cause for concern. If overall milk demand improves, it could result in higher milk prices. That will not help in the near term due to the July contract nearly being priced and will not move much from where it is. Currently, retail and food service demand for cheese is light.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.97 |
| 6 Month: | $18.36 |
| 9 Month: | $18.24 |
| 12 Month: | $18.20 |
CHEESE:
Cheese production is steady. Some plants need to purchase spot milk due to milk receipts declining. There remains a sufficient supply for demand with plants operating on full schedules, as they have been able to purchase spot milk. That may change as the summer temperatures increase, causing milk output to slow.
BUTTER:
The weakness of the butter price today was a bit of a surprise. It has been anticipated that buyers would remain aggressive and purchase supplies ahead of further price increases. The price retracement is expected to be short-lived.
OUTSIDE MARKETS SUMMARY:
December corn closed up 1.25 cents per bushel at $4.1550, November soybeans closed down 10.25 cents at $10.0725 and December soybean meal closed down $1.40 per ton at $282.90. September Chicago wheat closed down .75 cent at $5.4700. August live cattle closed down $0.20 at $219.78. August crude oil is up $0.05 per barrel at $68.38. The Dow Jones Industrial Average is up 218 points at 44,458, with the NASDAQ up 193 points at 20,611.
