Wednesday Morning Dairy Market Update - Limited Price Volatility Ahead of Cash

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:	Mixed
Soybean Meal Futures:	$2 to $4 Higher
Wheat Futures:	1 to 2 Higher

MILK:

The movement in milk futures was not very exciting on Tuesday, with the underlying cash providing little to get excited about. The same might be true today as traders look ahead to the July Milk Production report to be released on Thursday. However, spot trading will influence the market. The current market fundamentals may not provide much direction in the near term. Demand for more fluid milk for school accounts is being readily met due to higher milk production compared to a year ago. Milk prices should increase seasonally due to the increased demand, but there may be a limit to the gains unless demand improves. Traders are content to scalp the market with short-term trades rather than pick a long-term price direction.

CHEESE:

The time of year would favor cheese prices increasing as buying increases in preparation for the fall and holiday season. Greater demand from both bottling and manufacturing is tightening the supply. Cheese plants are finding prices for available spot milk running $3.00 lower to $2.00 above class.

BUTTER:

The butter price may move in a sideways range in the near term as supply and demand seem to be balanced. As the calendar moves forward, time may be running out for the price to see a significant increase for the remainder of this year. International demand is strong, but it has not had much impact on the butter price.

Tuesday Closing Dairy Market Update - Traders Show Little Emotion

OVERVIEW:

Milk futures suffered minor losses with traders not finding sufficient reason to move the market one way or the other. It has been one of the least volatile days we have seen for a while.

MILK:

The increase in the block cheese price and the decrease in butter and powder prices left little for traders to take advantage of. There may be little reason for milk prices to increase much further unless the supply of milk tightens. However, with milk production significantly higher than a year ago, the upside price potential may be limited. More milk is moving to deficit milk areas as schools reopen and fluid milk demand increases. This reduces the available milk for manufacturing, but it will not create a milk-deficient market.

USDA will release the July Milk Production report on Thursday, which is expected to show higher production than in July 2024. Part of the reason is that the impact of bird flu is not as prevalent as it was last year, with another part being that cow numbers are significantly higher.

AVERAGE CLASS III PRICES:

3 Month:	$17.95
6 Month:	$18.08
9 Month:	$17.99
12 Month:	$17.98

CHEESE:

The increase in the block cheese price during spot trading was offset by the decrease in dry whey. This left the Class III price calculation similar to what it was on Monday. The fact that no buyers or sellers showed up to do business in barrels increased the caution of traders. This could be looked at both ways, as buyers had no interest in bidding the price higher, which would be negative to the market. However, it could also mean that sellers have no interest in selling at a lower price. Barrels could just be taking a breather before increasing further.

BUTTER:

The decline in the butter price indicates it is not ready to trend higher. Sellers continue to offer supplies to the spot market rather than hold out for higher prices. Butter production has been running above last year's levels, keeping the market sufficiently supplied. The supply of cream is not abundant but adequate to keep churns active.

OUTSIDE MARKETS SUMMARY:

December corn closed down 3.25 cents per bushel at $4.0325, November soybeans closed down 7.50 cents at $10.3375 and December soybean meal closed up $4.10 per ton at $295.90. September Chicago wheat closed down 4.25 cents at $4.9850. October live cattle closed up $0.18 at $231.35. October crude oil is down $0.71 per barrel at $61.99. The Dow Jones Industrial Average is up 10 points at 44,922, with the NASDAQ down 315 points at 21,315.

Tuesday Midday Dairy Market Summary - Butter Sets Back

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	8 Lower
SOYBEAN MEAL:	$5.50 Lower
LIVE CATTLE:	$0.05 Higher
DOW JONES:	1657 Points Lower
NASDAQ:	Unchanged
CRUDE OIL:	$2.76 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased by 2.00 cents, closing at $1.85 with no load traded. No sellers showed up with two unfilled bids remaining at the closing of spot trading. The barrel cheese price remained unchanged at $1.81, with no loads traded and no buyers or sellers showing up to do any business. The dry whey price decreased 1.50 cents, closing at 59.00 cents with no loads traded. Class III futures are 9 cents lower to 10 cents higher, with the only gain seen in the September contract. The butter price decreased 1.25 cents after two consecutive days of gains, closing at $2.32 with two loads traded. There were nine uncovered offers remaining at the close of spot trading with no unfilled bids. Grade A nonfat dry milk price slipped 0.50 cent to $1.2650 with no loads traded. Class IV futures are 7 to 12 cents higher. Butter futures are 0.15 to 1.26 cents lower. Dry whey futures are 0.77 to 1.25 cents lower. Cheese futures are 0.10 cent lower to 1.20 cents higher.