GENERAL OVERVIEW:
Milk futures posted another strong day, with most of the strength in Class IV contracts. The increase in butter and nonfat dry milk prices provided strong support. The May Agricultural Prices report showed an increase in all prices used in calculating income over feed.
MILK:
Milk futures had a very strong day in response to the increase in spot prices. Block cheese only had a minor increase, but strength also came from the increase in the butter price. Class IV futures showed the greatest gain. The August contract gained about $1.80 over the past 3 days. The July, October, and November contracts are back above $19.00. It seems like seasonal buying is kicking in, which is driving the price higher. Seasonal buying does not seem to have begun in cheese, and maybe it will not to any great extent. However, historically butter leads the direction of the market and may trigger more aggressive buying interest in cheese. The May Agricultural Prices report showed an average corn price of $4.48 per bushel, up $0.17 from April, but down $0.18 from April 2025. The average premium/supreme hay price was $247.00 per ton, up $13.00 per ton from April, but down $30.00 per ton from April 2025. The All-milk price was $21.30 per cwt, up $0.50 from April, but down $0.10 from a year earlier. The average soybean meal price will be released on Tuesday, providing the final price to calculate income over feed for the Dairy Margin Coverage program. Other prices for comparison are the average soybean price at $11.60, up $0.40 from April and $1.20 per bushel higher than a year ago.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.10 |
| 6 Month: | $16.85 |
| 9 Month: | $17.04 |
| 12 Month: | $17.12 |
CHEESE:
Cheese prices may continue to struggle due to supplies being sufficient for demand. Buyers have been complacent and not willing to build inventory. The upside price potential may be limited in the near term.
BUTTER:
The continued increase in butter and the large jump in the nonfat dry milk price set the stage for higher prices, as buyers may step into the market to purchase to get ahead of increasing prices. Seasonal buying may also be taking place. Increasing temperatures will impact the butterfat level in milk, which could reduce cream supplies.
OUTSIDE MARKETS SUMMARY:
July corn closed down 10.75 cents per bushel at $4.0200, November soybeans closed down 17.25 cents at $11.3900, and July soybean meal closed down $2.30 per ton at $304.70. September Chicago wheat closed down 10.00 cents at $5.7975. August live cattle closed down $2.25 at $243.58. August crude oil is up $1.52 per barrel at $70.75. The Dow Jones Industrial Average is up 307 points at 52,183, with the NASDAQ up 523 points at 25,820.
