Class III Breaks Hard This Week

The July Class III contract fell more than a dollar on the week, closing out Friday’s trade at $23.56. Despite finishing 4.3750 cents higher today, the block/barrel average was still down almost a dime on the week at $2.15125/lb. This totals 26.1250 cents of losses since putting in the 2022 high on May 18th, with this week portraying a more bearish tone in the regional cheese reports. If cheese fails to find some footing soon, Class III milk could look expensive with many nearby contracts hanging near $24.00. Conversely, one could argue milk futures had made quite a run from early May to early June and were due for some technical retracement.

After pushing to new contract highs earlier this month, many Class IV contracts have set back. The July contract was 84 cents lower in this week’s trade with a $25.35 finish, 95 cents off the all-time high on the second month chart at $26.30 from the 8th. Spot butter fell 3.50 cents on the week with a close at 2.94/lb and remains at historically strong levels, while spot powder finished Friday’s trade at the recently familiar $1.80/lb spot. The fundamental picture remains more bullish for the Class IV markets compared to Class III, and Tuesday’s GDT Auction will give an update on how US markets compare with the world. Also on Tuesday, the USDA will release May Milk Production.