GENERAL OVERVIEW:
Milk futures were under pressure, with Class III futures showing the most weakness. Class IV futures were moderately lower. The weakness of Class III futures seems to be the result of sellers taking advantage of higher prices to establish short positions to hedge or to liquidate long positions for a profit.
MILK:
It was one of those days that did not make sense for the Class III market. The strength of spot cheese prices and a steady dry whey price should have provided support to the market. However, the traders decided to take some profits on previously established long positions, and hedgers sold them to establish short positions to protect milk prices. As selling pressured prices, further pressure ensued as positions needed to be established or profits needed to be protected. The pressure today may extend to the overnight session as the concern over further strength increased with the recent higher prices. Cheese supplies are sufficient for demand. Buyers may begin to look ahead to fall and holiday demand, but it is unlikely they will remain consistently aggressive. The August through November Class III futures are now above Class IV contracts for the same period.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.91 |
| 6 Month: | $17.29 |
| 9 Month: | $17.33 |
| 12 Month: | $17.36 |
CHEESE:
The barrel cheese price has moved to the highest level since November 19, 2025. Aggressive buying over the past two weeks is an indication that demand for barrels has improved. Even though there has not been much activity on the daily spot market, the price reflects the demand in the country through regular channels. The block price has increased 24 cents from the low and is knocking on the door of the high of May 6, after which the price fell.
BUTTER:
The butter price remains in a range, but under pressure. Supplies are not overabundant, but sufficient to meet domestic and international demand. Inventory is below a year ago, but steady production leaves buyers comfortable with supplies and little concern over future supplies.
OUTSIDE MARKETS SUMMARY:
December corn closed up 5.50 cents per bushel at $4.7300, November soybeans closed up 23.25 cents at $12.2625, and December soybean meal closed up $5.30 per ton at $323.80. September Chicago wheat closed down 8.75 cents at $6.7400. August live cattle closed up $2.10 at $226.53. September crude oil is up $0.69 per barrel at $82.47. The Dow Jones Industrial Average is down 307 points at 51,839, with the NASDAQ down 12 points at 25,508.
