GENERAL OVERVIEW:
There was not much excitement generated in milk futures, with limited price fluctuation. It is as if the market is on hold for the time being. The best that can be said for milk futures is that they have not fallen back to the levels of nearly two weeks ago.
MILK:
Milk futures experienced a recent push higher but have since retraced some of the gains. The underlying cheese and dry whey prices are supportive of Class III futures. However, traders have not been very aggressive buyers of contracts. Class IV futures did not see the pressure that would have been anticipated based on the lower butter and nonfat dry milk prices today. Traders are not chasing the market one way or the other unless there is a greater indication of price direction. Milk production is declining seasonally, being impacted by rising temperatures. Milk output is not expected to fall below the levels of last year, keeping sufficient supply available for bottling and manufacturing demand.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.76 |
| 6 Month: | $17.27 |
| 9 Month: | $17.32 |
| 12 Month: | $17.35 |
CHEESE:
Spot milk prices have increased from the previous week. The hot weather has had an impact on milk output, resulting in less milk moving to the spot market. Cheese plants that need to purchase extra milk are paying from $2.00 under class to as much as $5.00 over class. Some plants are not operating on full production schedules, anticipating milk receipts will improve after the hot weather subsides, as the forecast indicates.
BUTTER:
The Central region reports that the hot weather is impacting cream production more than anticipated. Most plants have reduced their production schedules, but it has not impacted the spot butter market so far. The spot price decline today was more than anticipated, indicating that sellers have butter to move and are willing to sell at lower prices. Butter supplies remain ample for demand.
OUTSIDE MARKETS SUMMARY:
December corn closed up 9.00 cents per bushel at $4.6950, November soybeans closed up 10.75 cents at $12.0175, and December soybean meal closed up $3.70 per ton at $320.00. September Chicago wheat closed up 32.50 cents at $6.7750. August live cattle closed down $1.30 at $230.13. August crude oil is up $0.92 per barrel at $80.26. The Dow Jones Industrial Average is up 150 points at 52,659, with the NASDAQ up 162 points at 26,269.
