GENERAL OVERVIEW:
It was another negative day for milk futures. The decline in Class III futures did not seem to be warranted, but maybe it will make more sense on Thursday. The June Federal Order class prices showed an increase in Class II and a decrease in Classes III and IV.
MILK:
Class III futures made new lows today as traders see limited upside potential and remove some of the premium deferred contracts hold. Class IV futures have nearly eliminated the gains realized recently as the nonfat dry milk price falls back to another new low. Hot weather is having an impact on milk production. However, many dairy farmers indicate that their cows have held output levels and feed intakes despite the rising temperatures. The June Federal Order class prices were announced today. The Class II price is $22.78, up $2.50 from the previous month and up $4.35 from June 2025. The Class III price is $15.98, down $0.94 from May and down $2.84 from a year ago. The Class IV price is $20.96, down $1.36 from May, but up $2.66 from June 2025. There is a large difference between the June Class IV announced price and the current July futures price at $18.00. That discount will not be reduced unless butter and nonfat dry milk prices increase.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.13 |
| 6 Month: | $16.79 |
| 9 Month: | $16.98 |
| 12 Month: | $17.07 |
CHEESE:
Steady spot cheese prices do not mean the market has found support. It may keep prices in a sideways trading range. Even though increased temperatures have impacted milk production, spot milk prices remain similar to what they were, ranging from $3.00 under to $0.50 over class. Cheese demand is reported as steady. Demand has been keeping up with production as inventories remain aligned with a year ago. There is some concern that inventories may not decline seasonally and remain higher through the second half of the year.
BUTTER:
Butter inventories are reportedly increasing despite strong demand. Churning has been active with plants running seven days per week. However, inventories in May were 9% below a year earlier. That has not caused concern over the potential for tighter supplies later in the year when demand increases seasonally. Buyers have been able to purchase ample supplies for immediate demand and to increase ownership for later demand.
OUTSIDE MARKETS SUMMARY:
December corn closed up 6.25 cents per bushel at $4.4225, November soybeans closed up 5.50 cents at $11.4925 and December soybean meal closed up $1.60 per ton at $304.70. September Chicago wheat closed up 10.75 cents at $6.0000. August live cattle closed down $0.60 at $241.83. August crude oil is down $1.38 per barrel at $68.12. The Dow Jones Industrial Average is down 14 points at 52,305, with the NASDAQ down 174 points at 26,040.
