OVERVIEW:
Traders had little to determine price direction today. Traders are remaining cautious after initially thinking underlying cash was going to increase. Class IV futures show more optimism in later contracts.
MILK:
Milk futures prices may have reached a level of support, but that will be determined by the strength of the underlying cash. They have had a nice rebound, but whether they will hold is another topic of discussion. Milk production reached its low point of the year and has been improving. The milk supply is not overwhelming the market, but it is sufficient for demand. Class III demand is steady as cheese production remains at a strong pace. Class IV demand has slowed, which may impact the upside potential of butter. Spot milk prices in the Central region remain the same as last week, ranging from class to $2.00 above class. Class IV milk futures remain below Class III futures through June 2026. The October and November contracts remain below $16.00.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.40 |
| 6 Month: | $17.25 |
| 9 Month: | $17.22 |
| 12 Month: | $17.25 |
CHEESE:
Cheese production is reportedly steady in much of the country. Output will increase over the next weeks as milk production continues to improve. Demand remains steady with inventory in line with a year ago. Spot cheese prices held much of the gains of Wednesday, possibly indicating that prices are low enough to increase the buying interest of end users.
BUTTER:
The butter price is likely to remain in a range near the current level. Buyers had been purchasing butter aggressively throughout the first half of the year, with bulk butter being manufactured and put into storage. Buyers do not need to be as aggressive now due to a sufficient supply already on hand, moving through the second half of the year. This may keep the price suppressed.
OUTSIDE MARKETS SUMMARY:
December corn closed down 3.00 cents per bushel at $4.2375, November soybeans closed down 6.25 cents at $10.3750 and December soybean meal closed down $1.00 per ton at $284.70. December Chicago wheat closed down 4.00 cents at $5.2425. October live cattle closed up $1.28 at $232.38. October crude oil is down $0.40 per barrel at $63.65. The Dow Jones Industrial Average is up 124 points at 46,142, with the NASDAQ up 209 points at 22,471.
