GENERAL OVERVIEW:
Class III futures closed with minor losses as the weakness of cheese had been factored in. Class IV futures posted double-digit gains due to the strength in butter and nonfat dry milk.
MILK:
Milk receipts are increasing as temperatures have returned more to normal. Some cows may not bounce back completely depending on their stage of lactation, but milk output is expected to remain above a year ago. The calendar will turn to August by the end of this week. The demand for milk from bottlers is expected to increase as they begin to prepare to fill the school pipeline. Some schools will reopen for the new school year by the middle of the month. This will not tighten the milk supply but will reduce some of the milk available to the cheese vat. This is seasonal and may not have much impact on the availability of supplies or market prices. The AMS weekly prices were not as expected by traders, with the July milk futures adjusting. The July Class III price decreased 12 cents, and the July Class IV price increased 11 cents after the report. The federal order class prices will be released on Aug. 5.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.35 |
| 6 Month: | $16.83 |
| 9 Month: | $17.02 |
| 12 Month: | $17.15 |
CHEESE:
Spot milk is less available following the recent hot weather. This has the spot milk price in the Central Region ranging from $1.00 to $5.00 over class. This is likely to increase as more milk will move to bottling in the next few weeks. Cheese production over the past week was steady to stronger.
BUTTER:
It was interesting to see the volume of butter purchased on the spot market today. Buyers were willing to purchase much of what was offered and needed to bid higher to get it. I reported incorrectly on the midday comments that there were no unfilled bids or uncovered offers remaining at the close of spot trading. There were 24 unfilled bids and 67 uncovered offers remaining.
OUTSIDE MARKETS SUMMARY:
December corn closed down 8.75 cents per bushel at $4.7175, November soybeans closed down 27.25 cents at $11.9275, and December soybean meal closed down $4.30 per ton at $323.50. September Chicago wheat closed down 1.75 cents at $6.6075. October live cattle closed up $1.80 at $223.98. September crude oil is up 5.53 per barrel at $84.79. The Dow Jones Industrial Average is down 1,153 points at 51,594, with the NASDAQ down 434 points at 24,443.
