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Milk futures, cash dairy mixed

Futures Markets copy

In Class III trade at the Chicago Mercantile Exchange, milk futures were mixed, consolidating on the last trading day of July. July was down $.02 at $15.26, August was $.01 lower at $16.84, September was up $.01 at $16.79, and October was $.06 higher at $16.72.

Over in the spot market, cash cheese was unchanged. Blocks held at $1.7325. Barrels were steady at $1.775 with four trades reported at that price. The last unfilled bid was on one load, also at $1.775.

Butter was down $.035 at $2.135. There was one trade reported at $2.13. The last unfilled bid was on one load at $2.135. The last offer uncovered was for one load at $2.17.

Nonfat dry milk was up $.0125 at $.85. There were a total of seven trades reported, from $.835 to $.8475. The last unfilled bid was on one load at $.85. The last uncovered offer was for one load at $.8575.

The USDA says the dairy prices received index during June 2016 was 73.6, up 2.1% from May 2016, but down 13% from June 2015. The all milk price of $14.80 per hundredweight was up $.30 on the month, but down $2.20 on the year. The average fat test was 3.68%. The price received for milk cows averaged $1,730 per head, compared to $1,820 a month ago and $2,030 a year ago. The feed grain index was 69.8, up 4.4% from last month and 6.1% more than last year.

Butter production for the week ending July 29th was called active, despite tighter supplies of cream. Many manufacturers are running full schedules, but some processors have slowed down and are selling extra cream. Domestic demand is called fair to good and processors are comfortable with supplies for the third and fourth quarter.

A decline in milk production and cheese makers are noting at least some decline in milk intake. Demand is solid, especially for fresh loads of cheese, but some Midwest sellers have turned back buyers because of short fresh supplies. Overall, Midwestern inventories are called “long”. Eastern and Western sellers have adequate needs for near term contractual obligations. International demand is limited by high prices.

Fluid milk production is declining in most of the U.S. because of high heat and humidity, but higher yields have been reported in the Pacific Northwest and Mountain regions. Cream supplies are tightening and demand from ice cream makers is makers is strong.

Retail ads for conventional dairy producers were down 7% on the week, while organic ads were up 2%. The price spread between organic and conventional half gallons of milk is $1.48, compared to $2.49 last week.

The dairy consumer price index for June was down 2.2% on the year, with fresh whole milk down 4.8%, cheese 2.6% lower, and butter up 4.8%.

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