Chicago, June 16 - U.S. milk futures continued their spiral down to contract lows on Tuesday with a decline in cash cheese prices enforcing concern over abundant dairy supplies, traders said.
* Early support from a lower dollar and higher stock market quickly faded when offers on the cash cheese market grew and cheese prices moved lower.
* Downturn in the stock market and paring of the loss in the dollar added to pressure late in the day.
* Demand for dairy products had slowed due to poor world economies and over production and futures have been working lower as they remove their premium to the computed milk price.
* Traders put the computed milk price around $9.75 per cwt, under the current June price.
* Class III milk traded at the CME is used to make cheese and price swings in cheese often influence milk futures.
* In pit trading, June milk <2DAM9> closed off 2 cents at $9.89, July <2DAN9> was off 7 cents at $10.28, and August <2DAQ9> off 23 cents at $10.97.
* In afternoon Globex trading, June <DCSM9> was up 1 cent from the pit close at $9.90, July <DCSN9> was up 2 cents from the pit close at $10.30, and August up 2 cents from the pit close at $10.99. July through October posted contract lows.
* In CME's cash cheese markets, block cheese had four trades from $1.1350 to $1.1400 and it closed at $1.1350, down from $1.1500 on Friday.
* Barrel cheese had three trades between $1.0775 and $1.0800 and it closed at $1.0775, down from $1.0925 on Friday.
* Butter also had three all at $1.2050, down from $1.2200 on Friday.