Market News

Milk futures lower, cash cheese higher

In Class III trade at the Chicago Mercantile Exchange, milk futures were down on profit taking after a couple of days of gains. July was down $.10 at $15.20, August was $.21 lower at $15.96, September was down $.25 at $16.06, and October was $.28 lower at $16.15.

Over in the spot market, cash cheese was higher. Blocks were up $.03 at $1.63 with one trade at that price. Barrels were $.03 higher at $1.72. There were a total of 18 trades, including 11 at $1.69 and one at the closing price. The last offer uncovered was for one load at $1.73.

Butter held at $2.2825. The last bid unfilled was on one load, also at $2.2825.

Nonfat dry milk was down $.0075 at $.89. There were a total of nine loads sold, including four at $.865. The last offer uncovered was on two loads at $.895.

The USDA reports butter churning remains active, but is down from the first two quarters of the year. Cream supplies are tighter because of higher ice cream production levels and lower milk components. However, many plants did take advantage of the increased availability over the July 4th holiday weekend. The Central region interest for butter is described as high, but for a tight supply. Regional sales were steady.

Some cheese manufacturers ran full schedules over the holiday weekend, also taking advantage of greater cream availability. Midwestern cheese producers say milk component production is decreasing, but yields are generally holding. Cheese sales in the Central and Eastern regions are called strong and seasonal demand for curds is rising in the Central region. Export demand for U.S. cheese is slow because of the recent dollar strength.

Fluid milk production is following the seasonal influences. The USDA does note some Midwestern loads are being diverted back to bottling with some retail outlets discounting gallons and increasing orders for bottled milk.

Conventional dairy ads were down 6%, while organic ads were up 133%. The price spread for organic and conventional half gallons of milk was $1.57, compared to $2.15 the previous week.