GENERAL OVERVIEW:
Mixed trading activity dominated milk futures. Trading activity was exceptionally strong in the July and August Class III futures contracts. The REAL Butter Act has been introduced to the U.S. House of Representatives.
MILK:
Traders focused on the July and August Class III contracts today, with over 1,000 traded in July and over 800 in August. It has been some time since trading volume was this large in contracts. The movement of spot prices did not provide much to generate the level of trading interest in Class III contracts. The May Milk Production report had little impact on the market as increased production and higher cow numbers were anticipated. In the top 24 states, there were only 5 states that showed a decrease in milk production. Pennsylvania declined 1.9%; Vermont declined 0.9%; both Virginia and Washington declined 0.8%; and New Mexico declined 0.4%. Kansas showed the largest increase with a gain of 21.2% and was followed by Oregon with a gain of 7.1%. All other states gained less than 5.0%. The REAL Butter Act has been introduced to the U.S. House of Representatives. The Act is designed to force synthetic dairy products to disclose their laboratory origins. Tony Wied, a Republican representing Wisconsin's 8th Congressional District, has initiated the bill. This targeted federal bill aims to establish strict, mandatory labeling requirements for synthetic, laboratory-grown butter products, which are a direct attack on American dairy farmers.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.13 |
| 6 Month: | $16.76 |
| 9 Month: | $16.95 |
| 12 Month: | $17.01 |
CHEESE:
The bounce in the cheese price is not expected to last or at least is not expected to see much upside potential. There is little indication of a tight market, which leaves buyers limited in their need to purchase cheese for upcoming demand. Any upcoming demand is expected to be met with sufficient cheese supplies due to strong cheese production.
BUTTER:
The butter price has fallen back further than expected and may continue with further weakness. Sellers want to move supplies at whatever price they can get. Buyers continue to hold back, remaining complacent.
OUTSIDE MARKETS SUMMARY:
July corn closed down 1.75 cents per bushel at $4.0975, November soybeans closed up .25 cent at $11.4175, and July soybean meal closed up $3.10 per ton at $302.90. September Chicago wheat closed down 10.50 cents at $5.9700. August live cattle closed down $1.35 at $246.00. August crude oil is down $0.65 per barrel at $73.21. The Dow Jones Industrial Average is down 46 points at 51,667, with the NASDAQ down 580 points at 25,587.
