GENERAL OVERVIEW:
Class III futures closed mixed while Class IV futures showed strong gains. Milk futures moved in line with cash and made more sense than they did on Wednesday. The May Cold Storage report was about as expected. May dairy cattle slaughter was less than expected.
MILK:
The trading volume was significantly lower than on Wednesday. Steady cheese prices did not provide much incentive for traders. Some areas see milk output over the spring flush peak, while others have seen milk production declining steadily, yet output remains higher than a year ago. Hotter weather is expected in many areas of the country shortly, which will impact milk production and component levels. Whether this could eventually tighten supplies remains to be seen. Higher cow numbers and increased milk production may minimize the impact on the overall supply. For the near term, expect the market to remain bearish. The May Livestock Slaughter report was released, showing dairy cattle slaughter totaling 191,700 head. This was 23,400 less than April and 5,100 head less than in May 2025. This was the lowest May slaughter since 2007. It was also the lowest monthly slaughter since June 2024.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.06 |
| 6 Month: | $16.67 |
| 9 Month: | $16.88 |
| 12 Month: | $16.95 |
CHEESE:
The May Cold Storage report showed American cheese inventory increasing by 3.3 million pounds from April, totaling 816.9 million pounds. This is 2% below a year ago. Swiss cheese stocks increased 1.2% from April, totaling 24.9 million pounds, up 10% from a year earlier. Other cheese stocks increased 7.8%, totaling 581.2 million pounds and nearly the same level as a year ago. Total cheese inventory increased 12.3% to a level of 1.423 billion pounds. This was 1% below April 2025.
BUTTER:
Butter futures showed substantial gains in response to the higher spot price on Wednesday and today. Strong buying interest could continue on Friday if buyers who did not accomplish business today turn more aggressive. Butter inventory during May increased 27.7%, totaling 335.6 million pounds. This was 8% below May 2025.
OUTSIDE MARKETS SUMMARY:
July corn closed up 7.75 cents per bushel at $4.1475, November soybeans closed up 22.00 cents at $11.5700, and July soybean meal closed up $4.60 per ton at $308.20. September Chicago wheat closed up 5.50 cents at $6.0150. August live cattle closed up $0.70 at $247.23. August crude oil is up $1.10 per barrel at $71.44. The Dow Jones Industrial Average is up 72 points at 51,921, with the NASDAQ down 118 points at 25,359.
