OVERVIEW:
Class III closed higher but could not hold the highs of the day in nearby contracts. The strength of cheese, butter, and dry whey. It is difficult to determine whether the lows of Friday established a bottom in the market.
MILK:
Class III milk futures closed higher but without conviction. Traders covered their short positions from last week, taking any profits that might have been had just in case prices trend higher in the near term due to renewed buying interest at the lower prices. Class IV futures close mixed. Increasing milk production compared to a year ago and cheese inventories remaining close to last year do not bode well for much upside price potential. Dairy cattle slaughter in July totaled 225,800 head. This was 37.000 more than June and 1,000 less than June 2024. The June-to-July slaughter was nearly identical to last year. In June 2024, dairy cattle slaughter totaled 186,400 head, with July slaughter increasing 39,500, totaling 225,900 head. This was somewhat of a surprise due to the increase in cow numbers in July of 10,000 head.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.91 |
| 6 Month: | $17.82 |
| 9 Month: | $17.75 |
| 12 Month: | $17.76 |
CHEESE:
Greater volumes of milk have been moving to bottling plants for school accounts. However, there is sufficient milk for manufacturing needs, keeping supplies available for buyers. Demand is good but has not increased as much as usual and anticipated. This could be a limiting factor in the potential for prices as the year progresses and higher demand generally unfolds.
BUTTER:
Buyers in the cash market were a bit more aggressive, taking advantage of the lower price that had recently developed. It is not certain that the price has found solid support, but low prices should cure low prices. The July butter inventory was 6.0% below July 2024, but that has not resulted in a tight market due to demand being slower than usual at this time of year. The butter price at the end of August 2023 moved sharply higher in September, reaching a record high on October 6. We cannot expect a similar move this year, as fundamentals are different and supplies are readily available.
OUTSIDE MARKETS SUMMARY:
December corn closed up .75 cent per bushel at $4.1225, November soybeans closed down 10.75 cents at $10.4775 and December soybean meal closed down $.60 per ton at $290.90. December Chicago wheat closed up 2.50 cents at $5.2975. October live cattle closed down $1.05 at $236.83. October crude oil is up $1.12 per barrel at $64.78. The Dow Jones Industrial Average is down 349 points at 45,282, with the NASDAQ down 47 points at 21,449.
