Market News

Milk futures higher, cash dairy mixed

Class III milk futures at the Chicago Mercantile Exchange were supported by an oversold bounce. July was up $.13 at $16.05, August was $.23 higher at $16.97, September was up $.20 at $17.16, and October was $.11 higher at $17.20.

Cash cheese blocks were down $.005 at $1.54. Seven loads were sold, including one at $1.54 and four at $1.545. Barrels were up $.03 at $1.37. A total of 23 loads were sold, three at $1.37. The last uncovered offer was for one load at $1.37.

Butter was $.005 higher at $2.59. The last unfilled bid was on one load at $2.59. The last uncovered offer was for one load at $2.60.

Nonfat dry milk was up $.005 at $.8475. Three loads were sold, including one at $.8475. The last unfilled bid was for five loads at $.8475.

The USDA says milk production in the U.S. followed seasonal patterns over the past week. Midwestern production was at below flush levels, with some talk cheesemakers will pull back on intakes to manage inventory. Spot milk is currently selling at $1 to $4 below Class. Milk is still readily available for cheese production, but those long inventories are creating a lot of uncertainty. Midwestern cheese sales are called slow to steady. Retail and food service demand for butter is strong and because of tighter supplies, many manufacturers are buying spot loads as needed. Some churners are at full schedules, but others have pulled back a little with manageable to heavy stocks. At the retail level, conventional dairy ads were up 19%, while organic ads were 5% lower. The spread between organic and conventional half gallons of milk is $2.48, in favor of organic.