OVERVIEW:
Milk futures suffered minor losses with traders not finding sufficient reason to move the market one way or the other. It has been one of the least volatile days we have seen for a while.
MILK:
The increase in the block cheese price and the decrease in butter and powder prices left little for traders to take advantage of. There may be little reason for milk prices to increase much further unless the supply of milk tightens. However, with milk production significantly higher than a year ago, the upside price potential may be limited. More milk is moving to deficit milk areas as schools reopen and fluid milk demand increases. This reduces the available milk for manufacturing, but it will not create a milk-deficient market.
USDA will release the July Milk Production report on Thursday, which is expected to show higher production than in July 2024. Part of the reason is that the impact of bird flu is not as prevalent as it was last year, with another part being that cow numbers are significantly higher.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.95 |
| 6 Month: | $18.08 |
| 9 Month: | $17.99 |
| 12 Month: | $17.98 |
CHEESE:
The increase in the block cheese price during spot trading was offset by the decrease in dry whey. This left the Class III price calculation similar to what it was on Monday. The fact that no buyers or sellers showed up to do business in barrels increased the caution of traders. This could be looked at both ways, as buyers had no interest in bidding the price higher, which would be negative to the market. However, it could also mean that sellers have no interest in selling at a lower price. Barrels could just be taking a breather before increasing further.
BUTTER:
The decline in the butter price indicates it is not ready to trend higher. Sellers continue to offer supplies to the spot market rather than hold out for higher prices. Butter production has been running above last year's levels, keeping the market sufficiently supplied. The supply of cream is not abundant but adequate to keep churns active.
OUTSIDE MARKETS SUMMARY:
December corn closed down 3.25 cents per bushel at $4.0325, November soybeans closed down 7.50 cents at $10.3375 and December soybean meal closed up $4.10 per ton at $295.90. September Chicago wheat closed down 4.25 cents at $4.9850. October live cattle closed up $0.18 at $231.35. October crude oil is down $0.71 per barrel at $61.99. The Dow Jones Industrial Average is up 10 points at 44,922, with the NASDAQ down 315 points at 21,315.
