Market News

Milk futures mostly higher, cash dairy up

In Class III trade at the Chicago Mercantile Exchange, milk futures were mostly higher, with the most active months supported by weather concerns and technical buying. August was up $.11 at $17.10, September was $.17 higher at $17.16, October was up $.12 at $16.92, and November was $.07 higher at $16.47.

Cash cheese blocks were up $.055 at $1.815. There were three trades reported. The last unfilled bid was on one load at the closing price. The last uncovered offer was for one load at $1.82. Barrels were $.025 higher at $1.88. There were a total of seven trades reported, including four at the closing price.

Butter was up $.0375 at $2.27. The last unfilled bid was on two loads at that price. The last uncovered offer was for one load at $2.31.

Nonfat dry milk was $.0025 higher at $.8325. The last unfilled bid was on one load, also at $.8325. The last uncovered offer was for one load at $.84.

The USDA says that for the week ending August 5th, butter production was steady, but below the first and second quarter levels. Cream supplies are tighter and some processers are focusing on meeting immediate needs, but others are still running at full capacity. Retail and food service demand are fair to good. The butter market undertone is called mixed and inventories are steady to higher. Cheese making is said to be active, despite high temperatures in much of the country. Sales in the Midwest are strong for processed cheese, Italian type cheese, and curds. Midwest inventories are mixed, USDA says it depends on the type of cheese, and export demand is light. Milk production is declining because of hot temperatures and high humidity and some manufacturers are buying loads of milk from outside of their usual suppliers. Class I bottlers are getting ready for the resumption of school. Ice cream and frozen desserts continue to command a lot of cream. At the retail level, conventional dairy ads were up 6% on the week and organic ads were 23% higher. The price spread for organic and conventional half gallons of milk is $1.17, compared to $1.45 a week ago.

For July, the Class II milk price was $15.16 per hundredweight, up $1.04 from June. The Class III price was $15.24, $2.02 higher. The Class IV price was $14.84, up $1.07.