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.
