Market News

Milk futures, cash dairy higher

Chicago Mercantile Exchange Class III milk futures were supported by another round of follow through technical buying, along with seasonally lower milk production. August was up $.11 at $16.56, September was $.25 higher at $17.16, October was up $.16 at $17.26, and November was $.12 higher at $17.27.

Cash cheese blocks were $.04 higher at $1.755. The last unfilled bid was on one load at $1.755. Barrels were up $.095 at $1.555. 19 loads were sold, including one at $1.555, five at $1.50, and five at $1.4625. The last unfilled bid was on one load at $1.55. The last uncovered offer was for one load at $1.555.

Butter was $.05 higher at $2.72. 22 loads were sold, including one at $2.72, with the rest ranging from $2.69 to $2.75. The last unfilled bid was on one load at $2.7125. The last uncovered offer was for one load at $2.72.

Nonfat dry milk was up $.0075 at $.86. The last unfilled bid was on two loads at $.86. The last uncovered offer was for one load at $.895.

The USDA reports milk production in the U.S. was steady to lower over the past week because of Summer weather. The Midwest region is eyeing increased Class I demand ahead of school starting and cheese processors say spot loads are flat to $1 lower than current market value. Cream demand for Class II processing in the region is reported as steady. The USDA says spot milk supplies headed to cheese plants in the Midwest are declining, but pizza cheese orders are still heavy. Production is mostly steady across the country, with balanced block supplies and long barrel supplies. USDA says there are concerns about the wide spread between block and barrel prices, but that this “could become the new normal”. Butter sales are stable with solid domestic food service and retail demand and improving export interest. Even with seasonally higher ice cream manufacturing, there’s still plenty of cream available and a number of processors continue to produce for expected demand later this year. At the retail level, conventional dairy ads were up 1% and organic ads were down 18%. The price spread between organic and conventional half gallons of milk is $1.00, in favor of organic.