Market News

Milk futures higher, cash cheese mixed

Class III milk futures at the Chicago Mercantile Exchange continued to bounce off the recent lows. September was $.09 higher at $16.35, October was up $.11 at $16.02, November was $.17 higher at $15.95, and December was up $.13 at $15.83.

Cash cheese blocks were $.005 lower at $1.5925. Three loads were sold, one at $1.5925 and two at $1.59. The last unfilled bid was on one load at $1.5925. The last uncovered offer was for one load at $1.60. Barrels were $.0175 higher at $1.53. Four loads were sold, three at $1.53 and one at $1.5225. The last unfilled bid was on two loads at $1.51. The last uncovered offer was for one load at $1.535.

Butter was unchanged at $2.4725. The last uncovered offer was for one load at $2.4725.

Nonfat dry milk was steady at $.82. Six loads were sold, including three at $.82. The last unfilled bid was on one load, also at $.82. The last uncovered offer was for one load at $.825.

The USDA reports the dairy cow slaughter during August 2017 was 265,600 head, up 39,800 on the month and 21,000 on the year. The monthly kill accounted for 9.2% of all cattle slaughtered last month, also higher than in July and August 2016. For the year to date, the dairy cow slaughter is 1.987 million head, compared to 1.907 million a year ago, or 9.4% of this year’s cattle slaughter, a little bit slower than last year’s pace. Total beef production for August 2017 was 2.4 billion pounds, up 6% on the year with a 7% increase in slaughter more than cancelling out a seven pound decline in the average live weight. Overall, 2017 beef production is 5% ahead of 2016.

The European Energy Exchange announced plans to start a liquid milk futures contract in the first half of 2018. Pending approval of the Exchange Council, that would make the EEX the first European exchange to offer a liquid milk contract. The contract would be for 25,000 kilograms and settled against a yet-to-be developed liquid milk index.