Market News

Milk futures, cash cheese higher

Class III milk futures at the Chicago Mercantile Exchange were supported by follow through buying. September was $.02 higher at $16.37, October was up $.15 at $16.17, November was $.30 higher at $16.25, and December was up $.26 at $16.09.

Cash cheese blocks were $.02 higher at $1.6125. Five loads were sold, including two at $1.6125. The last uncovered offer was for two loads at $1.62. Barrels were up seven at $1.60. 11 loads were sold, including one at $1.60. The last unfilled bid was on five loads, all at $1.60.

Butter was $.025 lower at $2.4475. Two loads were sold, one at $2.455 and one at $2.45. The last unfilled bid was on one load at $2.44. The last uncovered offer was for one load at $2.4475.

Nonfat dry milk was $.0025 higher at $.8225. One load was sold at $.8225. The last unfilled bid was on one load, also at $.8225. The last uncovered offer was for one load at $.83.

The USDA reports milk production was steady to lower in most of the U.S., along seasonal lines. Midwestern processors say bottling demand in the south and southeast has improved as plants come back on-line, reducing regional supplies. Cream supplies are, for the most part, available, with ice cream production winding down. Milk for cheese is tighter and spot prices in the Midwest are steady to $1.50 over the Class III price. Cheese production is mixed, depending on variety, and Midwestern curd sales are declining. Retail butter sales were steady to lower, but demand by some grocers is good as they try to build inventories ahead of fall demand. Spot sales were moderate and the USDA says worldwide fundamentals are “fairly strong”. Production ranges from shutdown to active and inventories are also mixed. At the retail level, conventional dairy ads were down 14%, while organic ads were up 20%. The spread between organic and coventional half gallons of milk is $1.12, in favor of organic, and the USDA says the spread between weighted averages for gallons of organic and conventional milk is $3.19, also in favor of organic.