GENERAL OVERVIEW:
Trade activity in the butter market seemed to be the highlight of the session Wednesday as prices quickly bounced off nearly 4-month lows. Milk futures were limited to single-digit price shifts, with very limited market direction developing in any contract months.
MILK:
Milk futures remained mixed Wednesday in very limited trade activity in all nearby and deferred contracts. The limited volume across the entire complex seems to be focused on current milk production levels, which are ample for current and expected short-term demand. But the onset of more summerlike weather in several production areas is causing some speculation that milk production will see seasonal pressure due to heat stress if this trend continues. June contracts are the most active contracts, falling 8 cents per cwt, moving to $16.52 per cwt. July through December contracts were able to etch higher, although limited gains and trade volume were seen in all contracts. The focus on strong domestic and export demand continues to help solidify price levels in the current market range, although it may take a significant shift in order to draw additional long-term support into the market through the summer months.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.70 |
| 6 Month: | $17.30 |
| 9 Month: | $17.55 |
| 12 Month: | $17.56 |
CHEESE:
Cash cheese prices were mixed on the daily CME exchange Wednesday. Block cheese prices posted a total of 8 loads selling during the exchange market, while prices continued to etch higher, moving to $1.4975 a pound, following a 0.5 cent-per-pound gain. Barrel cheese prices on the other hand backed away from previous market support, falling 3 cents per pound in limited trade activity. A total of 2 loads of barrel cheese sold on the exchange. In the most recent USDA cheese highlights report, Northeast milk production is strong, with cheesemakers running full schedules on contracted milk. Class III spot milk and condensed skim are scarce. May sales are improving, retail demand is lighter, bulk cheese demand is firm, and export interest exceeds supply. Central milk output is steady and above last year. Cheesemakers are running full schedules. Spot Class III milk is $6 under to $1 over Class. Holiday production levels are factoring into price variance for spot milk. Domestic demand is stronger and exports remain steady. Western milk production is meeting expectations, but is tight in some areas. Spot milk demand is moderate. Cheese production ranges steady to lighter ahead of the holiday and spot inventories remain tight. Domestic demand is steady while export demand is steady to strong.
BUTTER:
Cash butter prices quickly bounced higher Wednesday morning on the exchange. Following setting nearly 4 month market lows earlier in the week when traders returned from the long holiday weekend, buyer support has regained momentum during the last week of May. Butter supplies still remain readily available, and milk supplies moving to butter churns are far from short through the spring. But buyers seem to be aggressively willing to purchase at lower prices following the market decline. Cash butter prices surged 6 cents per pound in the last day, with another 14 loads exchanging hands during the session. This accounts for a weekly total of 50 loads, with two more trading days yet this week and month.
OUTSIDE MARKETS SUMMARY:
July corn closed down 5.00 cents per bushel at $4.5250, July soybeans closed down .75 cent at $11.8525 and July soybean meal closed up $2.00 per ton at $330.60. July Chicago wheat closed down 13.00 cents at $6.2250. August live cattle closed up $3.35 at $242.50. July crude oil is down $4.42 per barrel at $89.47. The Dow Jones Industrial Average is up 182 points at 50,644 and NASDAQ is up 18 points at 26,674.
