GENERAL OVERVIEW:
Class III futures close under pressure with numerous contracts posting double-digit losses. Class IV futures close mixed. The May Milk Production report came near expectations. U.S. milk production increased 2.3 percent, with cow numbers up 10,000 head.
MILK:
Unfortunately, some spot prices declined, putting further pressure on most milk futures contracts. The July Class III contract closed below $16.00 for the first time, and another new contract low. Subsequent months continue to roll down as spot prices remain weak. USDA released the May Milk Production report today. The top 24 states showed milk production up 2.4 percent from May 2025, totaling 19.8 billion pounds. Milk production per cow averaged 2,143 pounds, which was 9 pounds above a year ago. Cow numbers increased by 7,000 head from April. Milk production in the U.S. increased 2.3 percent over a year ago, with output at 20.6 billion pounds. Milk production per cow was 8 pounds higher than in May 2025. Cow numbers increased by 10,000 head. The nation's dairy herd was 184,000 head more than in May 2025, totaling 9.67 million head. This will continue the market bearishness.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.13 |
| 6 Month: | $16.76 |
| 9 Month: | $16.94 |
| 12 Month: | $17.00 |
CHEESE:
The block cheese price declined to the lowest level since February 13th. Buyers continue to hold for lower prices, seeing that sellers want to move supplies at whatever price they can get. They have no desire to hold cheese in anticipation that prices might strengthen later in the year. Strong milk production and increased cheese output leave little reason for cheese prices to see much upside potential. Plants are not interested in paying for storage with little benefit to hold inventory.
BUTTER:
The spot butter price has declined to the lowest level since May 22nd. The brief period of gain in late May has now been erased. It is uncertain where the price may find a bottom or if it will follow the path of the clock cheese price. There has recently been a slight increase in demand from the food service industry, but also a slight slowing in retail demand.
OUTSIDE MARKETS SUMMARY:
July corn closed down 6.00 cents per bushel at $4.1150, November soybeans closed down 1.25 cents at $11.4150, and July soybean meal closed down $1.50 per ton at $299.80. September Chicago wheat closed down 6.50 cents at $6.0750. August live cattle closed up $0.73 at $247.35. August crude oil is down $1.77 per barrel at $74.08. The Dow Jones Industrial Average is up 201 points at 51,766, with the NASDAQ down 351 points at 26,167.
