GENERAL OVERVIEW:
It was somewhat of an uneventful day as Class III futures were mixed with moderate trading volume. Steady cheese and dry whey prices left little for traders to hang their hats on. Class IV futures were under more pressure despite unchanged butter and nonfat dry milk prices. USDA estimates milk output this year at 235.4 billion pounds and next year at 236.0 billion pounds.
MILK:
Traders did not have much to provide volatility or price direction in the milk futures market. The World Agricultural Supply and Demand Estimates (WASDE) report was released today. USDA raised its estimate for milk production this year by 100 million pounds to a total of 235.4 billion pounds. They also released initial estimates for 2027 with milk production of 236.0 billion pounds. This was a low initial estimate, as the thinking might be that culling may increase at some point, reducing the dairy herd. Expansion may slow down due to increased costs and low milk prices. The USDA increased its estimates for milk prices for this year from the April report. The average Class III price was raised $0.10 per cwt to $17.00. The Class IV price was raised $1.35 per cwt to $19.95. The All-milk price was raised $0.75 to $21.25 per cwt. The initial estimate for 2027 is for the Class III milk price to average $17.55. The initial estimate for Class IV is $18.60. The All-milk price is estimated to average $20.95. This does not hold much hope for higher prices throughout next year.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.38 |
| 6 Month: | $18.01 |
| 9 Month: | $18.09 |
| 12 Month: | $18.01 |
CHEESE:
The average cheese price for this year was raised 0.50 cents to $1.65 per pound from the April estimate. The initial estimate for 2027 is $1.7150 per pound. The average dry whey price was raised this year by 0.50 cents to 66.50 cents per pound. The initial estimate for 2027 is for a price of 64.00 cents per pound.
BUTTER:
The average butter price was reduced on the World Agricultural Supply Demand report to $1.7250 per pound, down $0.09 from April. The initial estimate for 2027 is for the price to average $1.82 per pound. Nonfat dry milk was raised by $0.1950 to average $1.77 per pound. This initial estimate for 2027 was released at $1.5750 per pound.
OUTSIDE MARKETS SUMMARY:
July corn closed up 4.75 cents per bushel at $4.8000, July soybeans closed up 13.75 cents at $12.2675, and July soybean meal closed up $3.60 per ton at $328.40. July Chicago wheat closed up 45.00 cents at $6.7900. June live cattle closed down $1.70 at $247.70. June crude oil is up $3.93 per barrel at $102.00. The Dow Jones Industrial Average is up 56 points at 49,761, with the NASDAQ down 186 points at 26,088.
