Friday Closing Dairy Market Update - June Income Over Feed Is $11.10

OVERVIEW:

Class III futures tried to post better prices to close the day and the week, but traders' attitudes remain bearish. The income over feed price for June was $11.10, and the highest price since March.

MILK:

Nearby Class III futures showed little change for the week, while deferred contracts closed lower. Even though spot cheese prices showed gains for the week, traders remain bearish and were unwilling to provide much support to the market. Based on the movement of underlying cash, milk futures should have rebounded significantly. However, higher cash prices may increase seller interest. Lower feed prices and a significant supply of grain at harvest and next year should keep milk production strong. Cow numbers are expected to remain at higher levels as high replacement prices will keep culling rates lower. I made an error in reporting the premium/supreme hay prices in my closing comments on Thursday. I reported the average prices of a state rather than the overall average price. The average price was $244.00 per ton in June, down $33.00 from May and down $12.00 per ton from June 2024. The average soybean meal price for June was $280.70 per ton, down $8.05 per ton from May and down $103.40 per ton from June 2024.

AVERAGE CLASS III PRICES:

3 Month:	$17.69
6 Month:	$17.85
9 Month:	$17.82
12 Month:	$17.84

CHEESE:

For the week, blocks increased by 6.50 cents with 38 loads traded. The weekly average price was $1.6790. Barrels increased by 8.50 cents with five loads traded. The weekly average price was $1.6660. Dry whey price by one cent with 10 loads traded. The weekly average price was 53.90 cents.

BUTTER:

For the week, butter decreased 2.00 cents with 11 loads traded. The weekly average price was $2.4785. Grade A nonfat dry milk remained unchanged, with 13 loads traded. The weekly average price was $1,2890. The butter price continues to struggle as overall demand is steady to lower.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.00 cents per bushel at $4.1075, November soybeans closed steady at $9.8925 and December soybean meal closed up $4.50 per ton at $280.50. September Chicago wheat closed down 6.50 cents at $5.1675. October live cattle closed up $0.53 at $223.68. September crude oil is down $1.93 per barrel at $67.33. The Dow Jones Industrial Average is down 542 points at 43,589, with the NASDAQ down 472 points at 20,650.

Friday Midday Dairy Market Summary - Cheese Prices Gain While Butter Declines

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$3.60 Higher
LIVE CATTLE:	$2.25 Higher
DOW JONES:	643 Points Lower
NASDAQ:	504 Points Lower
CRUDE OIL:	$1.84 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased by 2.25 cents, closing at $1.7050 with nine loads traded. The barrel cheese price increased 3.00 cents, closing at $1.71 with five loads traded. There were three unfilled bids for blocks with no offers remaining. There was one unfilled bid and one uncovered offer for barrels at the close of spot trading. The dry whey price increased 1.75 cents, closing at 55.00 cents with five loads traded. Class III futures are mixed, ranging from 23 cents lower to 9 cents higher. February and later contracts are under pressure. The butter price decreased 2.75 cents, closing at $2.4450 with two loads traded. Grade A nonfat dry milk slipped 0.25 cent, closing at $1.2875 with nine loads traded. Class IV futures have not yet been traded. Butter futures are 0.80 cent lower to 1.00 cents higher. Dry whey futures are 0.90 cent higher.

Friday Morning Dairy Market Update - Limited Volatility is Expected

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	Mixed
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	3 to 4 Lower

MILK:

The limited strength of Class III milk futures may not follow through today unless spot cheese prices increase. This may be a tall order under the current market fundamentals. If underlying cash prices remain choppy and buyers and sellers conduct business without fanfare, milk futures will roll down as they approach expiration. Seasonal buying should provide support to the market, but buyers have been able to purchase what they need without difficulty. The average soybean meal price for June will be released today, providing the missing price for calculating the income over feed price for the Dairy Margin Coverage program.

CHEESE:

Cheese has been unable to rebound due to a sufficient supply available for demand. Cheese production is steady, with output meeting contractual needs. The excess is being offered on the spot market to limit plant inventories. Buyers are comfortable with current supplies and see no reason to be concerned over future supplies.

BUTTER:

Each day that goes by limits the price potential for the rest of the year. Buyers have been able to purchase supplies without difficulty. The cream supply has decreased, but remains sufficient for demand. The spot price is expected to remain rangebound.