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Milk futures, cash cheese lower

Class III futures at the Chicago Mercantile Exchange were pressured by follow through selling and demand uncertainties. May was down $.01 at $15.61, June was $.17 lower at $16.20, July was down $.21 at $16.62, and August was $.26 lower at $17.01.

Cash cheese blocks were down $.0175 at $1.6525. One load was sold at $1.6525. The last uncovered offer was for one load at $1.66. Barrels were $.03 lower at $1.47. 14 loads were sold, two at $1.47 and seven at $1.4875. The last unfilled bid was on one load at $1.45. The last uncovered offer was for one load at $1.47.

Butter was $.055 higher at $2.40. Two loads were sold, one at $2.40 and one at $2.385. The last unfilled bid was on two loads $2.3875. The last uncovered offer was for one load at $2.415.

Nonfat dry milk was down $.0025 at $.895. The last unfilled bid was on one load at $.89. The last uncovered offer was for one load at $.8925.

The USDA’s attaché in Australia projects 2017 milk production at 9.1 million tons, which would be down 2.7% from 2016. The expected year to year decline is attributed to a “significant disruption to production”, along with lower farm gate prices, a smaller herd, and an anticipated lower per cow yield. That lower production is expected to limit production and exports of butter, cheese, and whole and skim milk powder. The USDA’s attaché does expect higher prices and cheaper inputs to lead to bounce back in production, but does not expect a recovery in herd size, citing lower farm incomes.

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