Thursday Morning Dairy Market Update - Milk Futures Lower Due to Outside Market Pressure

OPENING CALLS:

Class III Milk Futures:	10 to 15 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	1 to 3 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	6 to 9 lower
Soybean Futures:	16 to 20 Lower
Soybean Meal Futures:	$2 to $4 Lower
Wheat Futures:	10 to 13 Lower

MILK:

Milk futures did not respond positively to the increase in spot cheese prices over the past two days as traders anticipate limited upside potential. The announcement of the level of tariffs being implemented was not liked by traders, with selling pressure on futures overnight. The sharp decline in the outside markets will influence trading Thursday. The dairy markets have already factored in much of the potential impact from tariffs. This should result in some price stability, but the initial reaction is negative. If spot prices increase, it could reduce the bearish attitude but may not provide much support to futures.

CHEESE:

Cheese prices have increased over the past two days, and it is possible the price could settle back as sellers may become more aggressive. The pattern over the past few months has been that price increases have been short-lived, generally lasting 2-3 days. This pattern is expected to remain as the market balances supply and demand.

BUTTER:

The butter price is not expected to move outside of the sideways trading range anytime soon. Churning is active with plants running on full schedules. There is sufficient supply to meet the current demand, with buyers purchasing ahead for later demand. The cream supply is abundant, but more demand may be seen from ice cream and other Class II products.

Wednesday Closing Dairy Market Update - March Class III Price Was $18.62

MILK:

Traders continue to expect cash prices to remain choppy. Even though cheese prices were higher, nearby futures closed lower with traders anticipating limited upside price potential. Milk production in the Eastern region continues to increase as the spring flush continues. Northeast milk plants report milk receipts are heavy and continue to increase. There is potential that the Northeast region may see some dumping of milk, as was seen last year. The USDA released the March Federal Order class prices today. The Class II price was $20.12 per cwt, down $0.96 from February and $1.00 below a year ago. The Class III price was $18.62, down $1.56 from February, but $2.28 higher than a year earlier. The Class IV price was $18.21, down $1.69 from a year ago and down $1.88 from March 2024. This is the first time the Class IV price has been below Class III since April 2023.

AVERAGE CLASS III PRICES:

3 Month:	$17.07
6 Month:	$17.59
9 Month:	$17.83
12 Month:	$17.81

CHEESE:

Cheese demand is mixed, with some indicating it has increased over the past few weeks. Others indicate there has been little change in demand from both retail and the food service industry. Cheese variety may have an influence on demand. Cheese production is slowly increasing as milk receipts are increasing at the plant level. Spot milk is more available with prices as low as $4.00 under class.

BUTTER:

The butter price seems to be comfortable at the current level as business is being done with limited price movement.

The cream supply remains abundant, keeping churning active. Some reports indicate cheese is not quite as heavy as it had been. However, the cream supply is far from being tight. Strong milk production keeps supply readily available to manufacturers. Buyers have obtained much of their needs for the Easter season and are purchasing supplies for later demand at the lower prices.

Wednesday Midday Dairy Market Summary - Traders Pay Little Attention to Cheese Strength

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$4.50 Lower
LIVE CATTLE:	$1.40 Higher
DOW JONES:	224 Points Higher
NASDAQ:	167 Points Higher
CRUDE OIL:	$0.55 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.75 cent, closing at $1.6650 with 11 loads traded. There have been 35 loads traded so far this week. The barrel cheese price increased by 3.75 cents, closing at $1.6975 with three loads traded. There were two unfilled bids for blocks and three unfilled bids for barrels remaining at the close of spot trading. There were four uncovered offers for loads of barrels remaining. The dry whey price slipped 0.50 cent, closing at 49 cents with two loads traded. Class III futures are 8 cents lower to 7 cents higher with very light trading activity. The butter price remained unchanged at $2.34 with seven loads traded. Grade A nonfat dry milk remained unchanged at $1.1725 with three loads traded. Class IV futures have not yet been traded. Butter futures are 3.12 cents lower to 0.25 cent higher. Dry whey futures are unchanged to 0.52 cent lower.