Wednesday Morning Dairy Market Update - Dairy Margin Coverage Prices Announced for July

OPENING CALLS:

Class III Milk Futures:	1 to 5 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	5 to 8 Lower
Soybean Futures:	12 to 14 Lower
Soybean Meal Futures:	$0.40 to $0.50 Lower
Wheat Futures:	9 to 11 Lower

MILK:

Dairy Margin Coverage prices were released Tuesday with the final milk margin above feed costs for the program at $9.93, down 95 cents from March. While the July calculations have corn and hay costs lower than June, soybean meal was higher. However, the greater impact on that calculation was derived from an 80-cent drop in the all-milk price -- the lowest we have seen since spring.

CHEESE:

Cheese saw some pressure led by the cash market Tuesday with barrels taking the biggest hit. Most of the market pressure is due to the time of year, lacking much retail demand. Overnight trade found minuscule gains in the early evening hours but mixed by morning.

BUTTER:

Butter had a rough day Tuesday with the cash market falling apart and bringing futures down with it. Overnight trade has been mixed, although traders do not anticipate support for butter anytime soon. The massive amounts of offers for loads of butter left standing at the close of the cash auction each day show the availability of butter is plentiful.

Tuesday Closing Dairy Market Update - Non-Fat Milk the Star of the Show

GENERAL OVERVIEW:

With most other sectors of the dairy market trading lower today, Non-Fat Dry Milk pulled away from the pack and traded 4 cents higher. Cash market helped solidify today's futures strength.

MILK:

The theme of the week is hot and humid temperatures which will have a direct impact on cow comfort and production. Class IV Milk traded mixed near the close today, not surprisingly given the strength of NFDM; however, the rest of the market traded lower on the day. Class III milk had a repeat of yesterday's trade patterns, finding some late-night strength then losing ground by morning, then closing lower in the afternoon. It is difficult for the milk market to find much strength until we see more demand come from retailers. The supply is still there, and we have more than enough to keep up with demand. Another issue to be mindful of for milk production is the skyrocketing feed cost. Corn and soybean meal have rallied to new multi-year highs this week in an unseasonably quick rally. Why this is important is the cost to keep some of the lower-producing cows just got a lot more expensive.

AVERAGE CLASS III PRICES:

3 Month:	$16.77
6 Month:	$17.01
9 Month:	$17.19
12 Month:	$17.33

CHEESE:

Blocks traded slightly lower today but the biggest impact on the cheese futures decline was barrels struggling to find support. Barrels closed 3.25 cents lower in the cash market today. The abundant supply of available milk for processing with the delay of fall or winter demand has put cheese in a lull until we see more buying from consumers.

BUTTER:

Butter was hit pretty hard today with a major selloff in the cash market. Butter closed down 5.75 cents with a large number (63) of standing offers left trying to find buyers for excess supply. The futures market had no choice but to follow along, trading down 3.70 to 5.80 cents by this afternoon. No relief is expected in the high cream environment we are in.

OUTSIDE MARKETS SUMMARY:

December corn closed up 8.25 cents per bushel at $5.4600, November soybeans closed up 29.75 cents at $13.1775, and December soybean meal closed up $7.30 per ton at $352.60. December Chicago wheat closed up 8.50 cents at $7.8250.

October live cattle closed down $0.60 at $212.08. October crude oil is up $4.99 per barrel at $90.75. The Dow Jones Industrial Average is down 419 points at 52,766, and the NASDAQ is down 271 points at 26,099.

Tuesday Midday Dairy Market Summary - Butter Sharply Lower

OUTSIDE MARKETS SUMMARY:

CORN:	8 Higher
SOYBEANS:	29 Higher
SOYBEAN MEAL:	$0.63 Higher
LIVE CATTLE:	$0.70 Lower
DOW JONES:	328 Points Lower
NASDAQ:	97 Points Lower
CRUDE OIL:	$3.74 Higher

MIDDAY MARKET UPDATE:

The block cheese price lost 0.75 cents closing at $1.4750 with no loads traded. There were 5 uncovered offers remaining at the close of spot trading. The barrel cheese price fell 3.25 cents settling at $1.5325 with no loads traded. The dry whey price climbed 0.25 cents to 73.75 cents with 5 loads traded. Class III futures are 17 cents lower to 4 cents higher. The butter price lost a whopping 5.75 cents to close at $1.3925 with 27 loads traded. There were 3 unfilled bids and 63 uncovered offers remaining at the close. Grade A nonfat dry milk gained 3 cents to close at $1.90 with 14 loads traded. Class IV futures are anywhere from unchanged to 15 cents higher. Butter futures are 1.70 to 5 cents lower. Dry whey futures are mixed at 0.25 cents lower to 0.20 cents higher. Cheese futures are 0.09 to 0.17 cent lower. Nonfat dry milk futures are 4 cents higher.

Tuesday Morning Dairy Market Update - Overnight Trade Picks Up as Class IV Weakens, Class III Turns Mixed

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	6 to 10 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 3 Lower
Soybean Futures:	7 to 10 Higher
Soybean Meal Futures:	$0.10 to $0.40 Lower
Wheat Futures:	2 to 3 Lower

MILK:

For nearly all this week, many parts of the country are under a heat advisory. While milk production has been trending higher most of the year, abnormally high temperatures that carry on for five to six days can typically have an impact on short-term milk supply. Tuesday, there is plenty of milk available, and the milk being produced has a lot of cream to keep churning at full capacity.

CHEESE:

Cheese saw little price movement Monday. With not much consumer demand in the short term, there is little reason to get excited about buying cheese at this time. Stocks are adequate and no change is expected in the next few weeks. The cash market showed much of that story to start the week off as it was unchanged with little bids or offers during the trading session.

BUTTER:

Butter is seeing a story play out of a processor sitting on an abundance of supply with a limited number of buyers available. The number of offers in the marketplace show that there is plenty of product to purchase. Bargain buyers are willing to step in here to purchase butter, especially with the holiday baking season just around the corner; however, there is no reason to get in a rush on Tuesday.