Thursday Morning Dairy Market Update - Milk Supplies Remain Sufficient

OPENING CALLS:

Class III Milk Futures:	8 to 15 Higher
Class IV Milk Futures:	5 to 15 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	5 to 6 Lower
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	5 to 7 Higher

MILK:

Class III futures may continue to be choppy with little direction from cash cheese and dry whey prices. Class IV futures may remain supported as nonfat dry milk buying interest remains strong. Milk production is steady to higher, keeping sufficient supply available for bottling and manufacturing. Increased demand for fluid milk due to schools reopening is being met with sufficient milk supply. Cheese and butter production remain steady. Dairy cattle slaughter increased in July, but did not reduce the cattle herd as reported on the monthly milk production report. Production is expected to remain above last year through the end of the year.

CHEESE:

The block cheese price closed below the previous low on Aug. 15. This indicates supply is sufficient as buyers have access to cheese without having to be aggressive. The usual seasonal buying has not been aggressive as buyers remain content to purchase supplies as needed and to increase inventory when desired.

BUTTER:

The volume of butter that continues to be offered to the market is unusual for this time of year or, in fact, any time of year. I have never seen the amount of uncovered offers consistently remaining at the end of each spot trading session. Spot trading activity has been substantial for quite some time. This may continue as cream supplies increase.

 

Wednesday Closing Dairy Market Update - Consumer Demand for Protein Spurs Manufacturing Growth

GENERAL OVERVIEW:

Class III futures moved into positive territory after spending most of the day lower. Class IV futures extended their gains, further widening the spread between the two classes. Class I demand continues to increase as schools reopen for the year.

MILK:

Milk supplies are sufficient for both bottling and manufacturing needs. Demand for Class II milk has been steady but is expected to diminish moving into and through September as ice cream production slows. The milk supply remains sufficient and is expected to increase while seasonal demand improves. This may keep the supply and demand balance similar to what it currently is and result in limited upside price potential. Manufacturers have been operating on full schedules with planned downtimes taking place. A significant part of the $13 billion being invested by processors across 19 states is focused on high-protein dairy products for global export markets and the protein sector of the domestic market as consumer demand surges. They are strategically positioning for demand growth in functional and performance nutrition categories.

AVERAGE CLASS III PRICES:

3 Month:	$16.66
6 Month:	$16.96
9 Month:	$17.11
12 Month:	$17.23

CHEESE:

Milk output has become more consistent as cooler weather has improved cow comfort. This leaves plants with more consistent milk receipts coming from farms. Increased production capacity at some plants has them reaching out to the spot market for supplies. The price range of spot milk has narrowed as the upper end has declined. Spot milk this week is flat-class to $2.00 over class.

BUTTER:

The cream supply varies throughout the country but is mostly available at the same prices as last week. Churns are running at full capacity on regular weekly schedules. Exports remain active due to significantly lower prices than the world market. Domestic supplies are plentiful with little concern over availability.

OUTSIDE MARKETS SUMMARY:

December corn closed up 13.00 cents per bushel at $5.3650, November soybeans closed up 28.25 cents at $12.6600, and December soybean meal closed up $10.10 per ton at $339.30. December Chicago wheat closed up 45.00 cents at $7.4825. October live cattle closed down $0.18 at $210.78. October crude oil is down $0.56 per barrel at $81.80. The Dow Jones Industrial Average is down 114 points at 53,464, with the NASDAQ down 21 points at 26,130.

Wednesday Midday Dairy Market Summary - Renewed Strength In Nonfat Dry Milk

OUTSIDE MARKETS SUMMARY:

CORN:	14 Higher
SOYBEANS:	28 Higher
SOYBEAN MEAL:	$9.60 Higher
LIVE CATTLE:	$0.30 Higher
DOW JONES:	123 Points Lower
NASDAQ:	51 Points Lower
CRUDE OIL:	$0.22 Higher

MIDDAY MARKET UPDATE:

The block cheese prices declined 1.75 cents to close at $1.51 with no loads traded. There was an unfilled bid and seven uncovered offers at the close of spot trading. The barrel cheese price remained unchanged at $1.5750 with no loads traded. The dry whey price increased 0.75 cent to close at 72.00 cents with one load traded. Class III futures are mixed, but mostly lower, ranging from 8 cents lower to 1 cent higher. The butter price declined 1.50 cents to close at $1.4650 with 32 loads traded. There was again a lot of selling interest as there were 86 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk gained 2.25 cents to close at $1.8325 with three loads traded. The price passed the previous high a week ago. Class IV futures are 13-40 cents higher. Butter futures are 1.47 cents lower to 1.20 cents higher. Dry whey futures are 0.02 -- 0.45 cent lower. Cheese futures are 0.80 cent lower to 0.30 cent higher. Nonfat dry milk futures are 0.20 -- 4.00 cents higher.