The big story out in the world and in the futures market today was yesterday’s Milk Production report, with June production up 3.3% on the year. We saw aggressive selling yesterday post-report and post-settlement. That selling returned and persisted through today’s cash session.
The aggressive selling in Class III futures held in the August and September contracts, with prices trading around 50 cents lower on strong volumes (600+ contracts in each month). The spot butter session is finding some footing below $2.50 per pound. Multiple sellers surfaced at the CME today, with the price dropping on only a handful of trades. Butter futures, like Class III, saw aggressive selling early on before the start of the cash session. Despite the selling in futures and lack of activity in spot blocks, there is still a healthy carry structure built into the cheese futures market, with nearly every contract trading over $1.80. Butter futures are in the same boat with most contracts trading on average around $2.60, at a premium of nearly 20 cents per pound compared to the cash market.
Today’s Highlights from Ever.Ag’s Know Your Markets
- Yesterday’s bearish Milk Production report seemingly gave more fuel to CME butter’s decline. The spot price tumbled $0.0575 to $2.4200 per pound, the lowest level since May. Three lots changed hands. Spot NDM also dropped, down $0.0225 to $1.2800 per pound, with four loads exchanged. Spot dry whey continued to ease, down a penny to $0.5375 per pound, with zero loads trading. CME cheese markets were unchanged with no trades for the third day in a row.
- Higher milk flows and lower CME spot prices sent futures falling. The September Class III contract took the biggest hit, sliding to $17.39 per hundredweight, a 66-cent loss. Q4 futures settled at $18.12, down 35 cents. Q4 Class IV futures also shed 35 cents and settled at $19.37 per hundredweight.
- US NDM is pulling further ahead of global milk powder prices, with the week’s CME average rising to $1.29 per pound compared to $1.26 in New Zealand and $1.25 in Europe. The US cheese average price of $1.67 per pound remains far below New Zealand’s $2.08 and EU’s $2.40. US butter sits at $2.47 per pound, a steep discount to $3.32 in New Zealand and $3.83 in Europe.
Source : Dairynews7x7 July 25th 2025 by Ever.Ag picked from Dairy Herd Management
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