GENERAL OVERVIEW:
Class III futures found strength from the increase in the block cheese and dry whey prices. However, traders were cautious with their exuberance as only the September and October contracts posted double-digit gains. Traders showed little interest in Class IV as much of the gain in butter was offset by the decline in nonfat dry milk. Cheese and butter production increased in June according to the Dairy Products report.
MILK:
The September and October Class III contracts pushed back above $17.00, but for how long? The market is likely to remain choppy as traders react to the movement in the spot markets. There is little to indicate the underlying cash markets will trend higher anytime soon. The best we have going for us is seasonality, but that may not follow the usual pattern due to continued strong milk production. The availability of spot milk varies across the country, with some areas seeing tighter supplies. Some of this is likely due to hot weather lingering in some areas. Some may be the result of greater demand from bottlers as they begin processing milk for school accounts. More milk will soon move from some areas to other areas that are in deficit.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.18 |
| 6 Month: | $17.37 |
| 9 Month: | $17.40 |
| 12 Month: | $17.46 |
CHEESE:
The June Dairy Products report showed American cheese production totaled 485 million pounds, up 1.1% from June 2025. Italian type cheese production totaled 522 million pounds, down 0.3% from a year earlier. Total cheese output reached 1.23 billion pounds, up 1.1% from June 2025. Dry whey production totaled 80.9 million pounds, up 7.3% from a year ago. Lactose output totaled 86.7 million pounds, down 115%. Whey protein concentrate was 5.3% lower at 42.2 million pounds.
BUTTER:
Butter production in June totaled 208 million pounds, up 8.5% from June 2025. Nonfat dry milk output totaled 165 million pounds, up 14.2%. Skim milk powder output totaled 28.7 million pounds, down 46.8%. Regular hard ice cream production totaled 68.7 million gallons, up 5.2%.
OUTSIDE MARKETS SUMMARY:
December corn closed up 2.00 cents per bushel at $4.6200, November soybeans closed up 3.00 cents at $11.7775, and December soybean meal closed up $1.00 per ton at $316.60. September Chicago wheat closed down 11.00 cents at $6.3125. October live cattle closed down $4.55 at $224.93. September crude oil is up $3.10 per barrel at $78.32. The Dow Jones Industrial Average is down 464 points at 53,885, with the NASDAQ down 15 points at 26,348.
