OVERVIEW:
Class III and IV with futures diverging with the September, October, and November Class IV contracts below Class III. The butter price fell below the low on Friday and moved to the lowest price for the year.
MILK:Class III milk prices showed some hope, but extended gains need to be seen before traders will turn more aggressive buyers. Much of the trading activity is confined to scalping the market to hopefully make a profit. Most traders are not taking long-term positions due to market choppiness. The September, October, and November Class IV contracts are below Class III futures, providing a negative outlook for Class IV milk. Price increases in underlying cash will reach a level that will bring sellers to the market as they will move more supply. The current Class III futures prices are enough to keep farms holding onto cows and pushing more milk production for cash flow. Plentiful feed supplies at lower prices will keep the income over feed price at a good level. The USDA will release the July Agricultural Prices report on Friday, which is expected to continue to show a strong income over feed.
AVERAGE CLASS III PRICES:| 3 Month: | $18.09 |
| 6 Month: | $17.97 |
| 9 Month: | $17.86 |
| 12 Month: | $17.85 |
Spot cheese prices have developed a sideways pattern with a bias to the downside when you look at the daily price charts. The supply of cheese is not overwhelming the market, and demand is good, but it is not enough to tighten the supply of cheese. Inventory is slightly higher than a year ago and may remain that way through the rest of the year. Higher milk production will leave sufficient milk for manufacturing demand.
BUTTER:The potential of higher butter prices this year is becoming dimmer by the day as the spot price moved to the lowest level of the year and back to the lowest level since December 21, 2021. Butter production will slowly rise as more cream is available for churning as the year progresses.
OUTSIDE MARKETS SUMMARY:December corn closed down 2.75 cents per bushel at $4.0950, November soybeans closed up 1.75 cents at $10.4950 and December soybean meal closed up $2.40 per ton at $293.30. December Chicago wheat closed up 2.00 cents at $5.3175. October live cattle closed up $1.38 at $238.20. October crude oil is down $1.47 per barrel at $63.33. The Dow Jones Industrial Average is up 136 points at 45,418, with the NASDAQ up 95 points at 21,544.
