OVERVIEW:
Cheese prices reached the threshold and fell back significantly in the case of blocks. Class III futures reacted quickly, with September falling limit down for a brief period of time. Fortunately, futures did recover somewhat but closed with significant losses.
MILK:
It was a dismal day for Class III futures as cheese prices reached a threshold for now. The aggressive buying dried up, and sellers stepped up to the plate in an attempt to sell loads before prices declined very much. That action propelled the market lower. Class III futures suffered significant losses with the September contract falling to the 75-cent daily limit before the selling subsided. Two days ago, the contract reached a high of $19.20 and is now $1.00 lower. Summer temperatures have impacted milk output, but production remains higher than a year ago. Higher cow numbers and increased milk per cow should keep overall production strong for the rest of the year. Milk is beginning to move to other parts of the country to satisfy the demand from deficit areas for school milk. Processors have sufficient milk to meet demand for dairy products.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.84 |
| 6 Month: | $17.88 |
| 9 Month: | $17.88 |
| 12 Month: | $17.90 |
CHEESE:
The block cheese price fell back to the lowest level since August 1. The uncovered offers at the close of spot trading with no unfilled bids may indicate that further weakness may unfold on Friday. The market has fallen faster than it has increased and may continue that way. Domestic demand for cheese is termed as steady to light, which is unusual for this time of year.
BUTTER:
Even though butterfat components in milk are running lower due to the hot weather, manufacturers continue to see sufficient cream available for churning. Ice cream production is slowing, and more milk will be standardized for the school systems, keeping sufficient cream available to meet demand.
OUTSIDE MARKETS SUMMARY:
December corn closed steady at $3.9725, November soybeans closed down 15.75 cents at $10.2850 and December soybean meal closed down $2.30 per ton at $295.00. September Chicago wheat closed down 3.75 cents at $5.0350. October live cattle closed down $2.60 at $226.83. September crude oil is up $1.30 per barrel at $63.95. The Dow Jones Industrial Average is down 11 points at 44,911, with the NASDAQ down 2 points at 21,711.
