Not Much Market Excitement Expected Friday
Overnight trading activity was very light. The choppiness of the underlying cash has reduced some of the trading interest. Low futures prices have reduced the interest of hedgers to protect prices.
OPENING CALLS:
| Class III Milk Futures: | 3 to 8 Higher |
| Class IV Milk Futures: | 4 to 10 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 2 to 3 Lower |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 4 to 5 Lower |
MILK:
The World Agricultural Supply and Demand report released on Thursday will have no impact on the market Friday. However, the report showed the USDA estimates milk production to increase significantly despite low milk prices. They increase their estimate for this year by 1.0 billion pounds and the same for 2027. If this comes to fruition, the milk production increase this year would be 4.7 billion pounds more than in 2025. Demand will need to increase significantly to keep pace with supply to shift milk prices higher. Trading activity is expected to be light ahead of spot trading Friday, with limited price movement expected.
CHEESE:
The divergence in price between blocks and barrels on Thursday was unusual. The decline in barrels had no direct impact on the Class III milk price. However, it may indicate the overall weakness in the market or the continued inability of prices to see much upside potential.
BUTTER:
Spot trading activity in butter and nonfat dry milk has been substantial this week. There have been 101 loads of butter and 46 loads of nonfat dry milk traded in the spot market. Buyers and sellers have been active; unfortunately, prices have been lower. Nonfat dry milk has seen substantial weakness since its peak, with the price falling faster than it increased.
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NOTE:
The cattle complex has seen record-high prices in the last year. But it’s also been saddled with record-high risk and volatility, among many other challenges. To better understand these cattle market challenges, join DTN Livestock Analyst ShayLe Stewart for the inaugural Beef Industry Exchange webinar hosted by Senior Livestock Editor Jennifer Carrico at 9 a.m. CDT on June 24.
In addition to ShayLe’s cattle market update, DTN Ag Meteorologist John Baranick shares how variability and a building Super El Nino might save or doom U.S. pastures. Due to widespread drought conditions across the U.S., cow-calf producers may be considering a reduction of the herd. To prepare for this, University of Nebraska Lincoln Beef Systems Extension Educator Aaron Berger shares different strategies to set up cow herd rebuilding when it rains again. Register for the free webinar today: https://dtn.link/BeefIndustryExchange.
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Robin Schmahl can be reached at rschmahl@agdairy.com
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