• The spot cheese trade stalled mid-week but was higher on the week overall, the block/barrel average up over 11 cents per pound on the week.
• Cold storage from earlier in the week showed strong growth in butter inventories and overall cheese inventories lower than last year.
• Regional cheese reports offer bullish support of prices stating milk availability tightening with strong demand for cheese.
• Dairy cow culling continues at strong rates YoY, with the week ending 7/15 up 7.5% from last year.

The dairy markets started and finished strong this week with a cool-off period in the middle. Highlighted by an extremely bullish Monday trade that saw the price of blocks up 8 cents on 5 trades, the barrel price up 17.5 cents on no trades, Aug-Nov Class III futures all limit up, and Sep-Nov Class IV futures all up over 40 cents. Tuesday’s trade did not follow through on that bullish momentum as Class III futures fell under heavy selling pressure, giving up plenty of the gains from Monday, Class IV was mixed to lower, while the spot markets were relatively unchanged. Wednesday and Thursday were very similar in seeing mixed trading with Class IV in the green but Class III under selling pressure again, spot butter up, and spot cheese down. With a positive trade Friday, 2nd month contracts for the week were up 56 cents for Class III and 52 cents for Class IV, and the spot markets all higher on the week except for powder. Butter finding gains on the week and heavy trading are positives considering the Cold Storage report showing a YoY growth of butter inventories at 14.4%. The same Cold Storage report gives confidence to recent activity in the cheese spot trade, showing YoY decline in supplies, as milk availability continues to shrink, processing remains strong and reported strong demand. This is the fourth straight week of a positive spot cheese trade which brings optimism for continued higher prices in the dairy markets.