Tuesday Morning Dairy Market Update - Traders Show Overnight Optimism

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	6 to 8 Lower
Soybean Meal Futures:	$2 to $4 Lower
Wheat Futures:	2 to 4 Lower

MILK:

There is ample milk supply to meet the needs of bottling and manufacturing. Milk output is lower due to higher temperatures, but higher cow numbers and higher per-cow production keep milk from being tight. Milk components have decreased. The decrease in butterfat content has tightened the cream supply. The demand for fluid milk from bottlers will increase as they prepare for the reopening of schools. This will reduce the amount available for the cheese vat and other dairy product production. However, this may not provide much support to the market unless demand improves significantly.

CHEESE:

The weakness in block cheese on Monday may indicate the market may remain choppy. Some feel that buying interest will increase as buyers prepare for expected fall and holiday demand. However, with sufficient supplies available, that buying may be delayed.

BUTTER:

Cream supplies have tightened, but it may not be sufficient to reduce the supply available for butter production. Butter inventories have been below a year ago, but buyers have not been concerned over it. Manufacturers continue to offer butter on the spot market.

Monday Closing Dairy Market Update - June Income Over Feed Was $10.88

GENERAL OVERVIEW:

Class III futures closed mixed while Class IV futures closed lower in most contracts. Traders resigned to the fact that the market may not be ready to trend higher. Tuesday is the last day to trade July futures and options.

MILK:

Optimism was revived last week as both the underlying cash and futures increased. There were hopes that increased buying interest would support the market. Class III futures traded higher in overnight trading in anticipation that spot prices would see continued strength. However, milk supplies remain sufficient for demand, limiting concerns over supply tightness. Higher prices will increase seller interest, limiting the upside potential. The average soybean meal for June was released at $319.68 per ton. This was down $19.04 per ton from May, but up $38.98 per ton from June 2025. This price was needed to finalize the income over feed price for June. The income over feed price was $10.88, up $0.26 from May and the highest price since August 2025. Tuesday is the last trading day for July futures and options, with the Federal Order class prices announced on Wednesday.

AVERAGE CLASS III PRICES:

3 Month:	$16.71
6 Month:	$17.18
9 Month:	$17.30
12 Month:	$17.39

CHEESE:

There is no indication whether the block cheese price will slip back again or whether seasonal buying interest could increase. Even if buyers are more aggressive, the price may not increase by leaps and bounds as cheese supplies are sufficient for demand and likely will remain that way.

BUTTER:

Last week, the butter price only increased 0.75 cent from the previous week. The weakness today keeps the market in a downtrend. The sellers in the spot market that were absent on Friday showed up again today with offers above the market. The positive aspect is that they were not aggressive, or the price could have been under further pressure.

OUTSIDE MARKETS SUMMARY:

December corn closed up 8.50 cents per bushel at $4.7250, November soybeans closed up 4.75 cents at $11.9225 and December soybean meal closed up $0.40 per ton at $321.60. September Chicago wheat closed up 11.75 cents at $6.5100. October live cattle closed down $0.53 at $226.73. September crude oil is down $4.71 per barrel at $79.96. The Dow Jones Industrial Average is up 693 points at 53,178, with the NASDAQ up 540 points at 25,914.

Monday Midday Dairy Market Summary - Spot Prices Drop Back

OUTSIDE MARKETS SUMMARY:

CORN:	8 Higher
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$1.50 Higher
LIVE CATTLE:	$0.15 Higher
DOW JONES:	499 Points Higher
NASDAQ:	538 Points Higher
CRUDE OIL:	$4.61 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 1.25 cents to close at $1.5600 with two loads traded. The barrel cheese price remained unchanged at $1.5475 with no loads traded. The dry whey price remained unchanged at 69.25 cents with no loads traded. Class III futures fell back after posting strong overnight gains in the nearby months. Contracts through December are 1-15 cents lower with later contracts slightly higher. The butter price declined 3 cents to close at $1.4850 with two loads traded. Sellers returned to the spot market, but were not very aggressive. There were 66 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk declined 3.50 cents to close at $1.5250 with six loads traded. Class IV futures are unchanged to 15 cents higher. Butter futures are 2.17 -- 3.19 cents lower. Dry whey futures are steady to 0.40 cent higher. Cheese futures are 0.60 cent lower to 0.60 cent higher. Nonfat dry milk futures are steady to 1.07 cents lower.

Monday Morning Dairy Market Update - Buying Interest Supports Overnight Futures

OPENING CALLS:

Class III Milk Futures:	10 to 20 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	6 to 8 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	Mixed

MILK:

The bounce in block cheese on Friday and the strength in butter are providing optimism that seasonal buying may increase. Of course, one day of strength in block cheese does not indicate the trend has changed, but it may indicate buying interest may improve. The milk supply remains plentiful. Greater milk movement to bottling will increase soon to supply school accounts as another school year begins. Schools will reopen mid-month in some areas. Even though more milk will be diverted to bottling, it is not expected to tighten the supply for manufacturing. Higher milk prices will need increased consumer demand for milk and dairy products. It is interesting to see overnight trading volume in the July contract as Tuesday is the last trading day and it is a cash-settled contract. The price will not move much and will adjust to the announced Class III price on Wednesday. This does not provide any specific direction to the market.

CHEESE:

It is uncertain whether the price increase in block cheese on Friday indicates support has been found or whether the market will continue to chop around as buyers and sellers take care of business.

BUTTER:

There has been a lot of trading activity in the spot market for quite some time. Both domestic and international demand has been good, but the price has been in an overall downtrend since March. Seasonal buying should increase over the next month, but it is difficult to determine the extent of the upside price potential.