GENERAL OVERVIEW:
Class III futures were able to find some footing today, with most contracts closing higher. The bounce in the cheese price triggered some short covering. Very little trading activity took place in Class IV futures. USDA raises milk production for this year and for 2027.
MILK:
Class III milk futures finally showed some strength, but it was minimal relative to the increase in block cheese and dry whey. When spot prices increase, traders will remain cautious as price gains have been short-lived. Class IV futures were higher in some contracts despite the decrease in butter and nonfat dry milk. USDA raised its estimate for milk production for the year to 236.4 billion pounds, an increase of one billion pounds from the May estimate. The estimate for 2027 is 237.0 billion pounds, an increase of one billion pounds. This is the largest increase I have seen from the previous month. Their estimate for Class III milk this year was lowered by $0.40 per cwt to average $16.60 and remained at $17.55 for 2027. The Class IV futures were reduced by $0.60 per cwt to $19.35. The estimate for 2027 remains the same at $18.60. The All-milk price was lowered by $0.55 per cwt. To $20.70. The average All-milk price for 2027 was reduced by $0.05 per cwt to $20.90.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.53 |
| 6 Month: | $17.26 |
| 9 Month: | $17.39 |
| 12 Month: | $17.42 |
CHEESE:
USDA reduced its estimate for cheese prices this year to $1.61 per pound on the World Agricultural Supply and Demand report, down 4 cents from the May estimate. The dry whey price was reduced by 0.50 cents to average 66.00 cents. The estimate for 2027 was raised by 1.0 cent to 65.00 cents.
BUTTER:
USDA reduced its butter estimate for this year by 1.50 cents to average $1.74, while the average price remained unchanged at $1.82. Nonfat dry milk was reduced by 7.00 cents to average $1.70. The estimated price for 2027 remained unchanged at $1.5750.
OUTSIDE MARKETS SUMMARY:
July corn closed down 7.25 cents per bushel at $4.1175, July soybeans closed down 8.00 cents at $11.1500 and July soybean meal closed down $.20 per ton at $301.70. July Chicago wheat closed down .75 cent at $5.8675. August live cattle closed up $1.18 at $242.68. July crude oil is down $3.62 per barrel at $86.41. The Dow Jones Industrial Average is up 936 points at 50,845, with the NASDAQ up 640 points at 25,810.
