OVERVIEW:
Milk futures closed lower in response to the bearish milk production report and lower spot prices. The July Cold Storage report showed a good decline in butter inventory and a slight decline in cheese inventory.
MILK:
It was not long ago that September Class III futures were at $19.00. The close of today has September at $18.26. Futures have declined in the past three days as traders anticipated weakness and then reacted to it. Class IV futures followed a similar pattern, with futures declining over the past four days. More milk has been moving to bottling for school accounts, but that has had little impact on the market due to milk production running significantly higher than last year. It does not appear that this will change anytime soon. Farms are holding onto cows that normally might have been culled and are finding out that another lactation is showing better milk production in some cases, and the cow is able to have another crossbred calf that brings a substantial amount of money. Another added benefit is that the cow might be paid for rather than replacing it with an expensive heifer. The price of the beef-on-dairy calf sold after it is a few days old may hold the values of as much as 5,000 pounds of milk at $20.00 per cwt. Cows are not being culled as much to generate extra income anymore.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.80 |
| 6 Month: | $17.72 |
| 9 Month: | $17.66 |
| 12 Month: | $17.67 |
CHEESE:
The July Cold Storage report showed American cheese inventory decreasing by 2.9 million pounds, totaling 808.2 million pounds, and 2% above July 2024. The inventory of Swiss cheese decreased by 503,000 pounds to a total of 22.5 million pounds, and 1% above a year ago. Other cheese inventories increased 248,000 pounds and were 1% below a year ago. This resulted in total cheese inventory declining by 3.2 million pounds and is 1% above July 2024. For the week, blocks declined 2.50 cents with 18 loads traded. Barrels declined 2.00 cents with four loads traded. Dry whey declined by 4.50 cents with 15 loads traded.
BUTTER:
The inventory of butter declined by 24.0 million pounds to 331.4 million pounds, down 6% from July 2024. This was not a large decline, but a decline. Lower stocks than a year ago still have not been able to support the market. For the week, butter declined 6.50 cents with 16 loads traded. Grade A nonfat dry milk declined a penny with 28 loads traded.
OUTSIDE MARKETS SUMMARY:
December corn closed down .25 cent per bushel at $4.1150, November soybeans closed up 2.50 cents at $10.5850 and December soybean meal closed down $2.70 per ton at $291.50. December Chicago wheat closed down 2.50 cents at $5.2725. October live cattle closed up $3.15 at $237.88. October crude oil is up $0.14 per barrel at $63.66. The Dow Jones Industrial Average is up 853 points at 45,632, with the NASDAQ up 396 points at 21,497.
