GENERAL OVERVIEW:
There was a slight reprieve from the bearishness in Class III futures. Trading activity was high in both Class III and Class IV contracts. Class IV futures showed strong gains, with the October and November contracts above $20.00.
MILK:
Trading activity was strong, with the October Class III contract posting over 1,000 trades, followed by November with over 800 contracts traded. Class IV trading activity was unusually high, with contracts traded through September 2027. The October and November contracts moved above $20.00, where they have not been since April 28. The increase in the nonfat dry milk price is relentless, with the spot price either steady or higher for the past 14 consecutive trading days. The August Milk Production report showed higher milk production due to cow numbers being 167,000 head more than a year ago. August was a month with a lot of hot weather, which resulted in milk per cow being one pound below a year ago. Milk per cow may rebound significantly as the hot weather is behind us. This will maintain milk output above a year ago for the rest of the year and possibly longer. USDA will release the August Livestock Slaughter report on Thursday showing the level of culling seen during the month. Even if culling was higher, the increase was offset by higher cow numbers.
AVERAGE CLASS III PRICES:
| 3 Month: | $15.89 |
| 6 Month: | $16.17 |
| 9 Month: | $16.47 |
| 12 Month: | $16.71 |
CHEESE:
Cheese production is steady in most cases. A significant volume of milk is moving to the Southeast from the Midwest to satisfy the general demand from consumers and the increased demand from school accounts. The spot price indicates the supply has not changed much from the previous week, as spot milk prices are flat class to $2.00 above class. The dry whey price moved to the highest level since February 23, 2022, at the close of spot trading.
BUTTER:
The tone of the butter market is somewhat uncertain. Cream supplies are steady and increasing, leaving sufficient supplies available for those who need to purchase for production. Ice cream production is winding down. Butter demand in some areas of the country is termed lackluster and lower than expected at the current low prices. Retail sales should begin to improve as the Fall season is here.
OUTSIDE MARKETS SUMMARY:
December corn closed down 7.75 cents per bushel at $5.2900, November soybeans closed down 7.50 cents at $13.1800, and December soybean meal closed down $.10 per ton at $370.60. December Chicago wheat closed down 8.75 cents at $7.0850. December live cattle closed up $2.90 at $222.35. November crude oil is up $2.13 per barrel at $92.65. The Dow Jones Industrial Average is down 352 points at 51,512, with the NASDAQ down 308 points at 26,936.
