Friday Closing Dairy Market Update - Class IV Futures Fell Under Substantial Pressure

GENERAL OVERVIEW:

Class III futures held in a sideways pattern during the week, while Class IV futures declined. The trading volume in spot butter was less than the previous week, but there was good volume in nonfat dry milk.

MILK:

There is not much to be said about the activity of the week, with spot prices reflecting the fundamentals. Class III futures moved in a sideways pattern as the block cheese price moved in a range. Dry whey showed weakness as demand remains strong, but supply is sufficient. Demand for dairy is good overall as higher production of dairy products in April had been absorbed, keeping inventory below a year ago. Class IV futures were under pressure all week due to the weakness of nonfat dry milk and the potential for further weakness during the summer. Milk production remains above a year ago and is expected to remain that way. A significant bullish shift is not expected that would result in traders taking a long-term position in the futures market.

AVERAGE CLASS III PRICES:

3 Month:	$16.71
6 Month:	$17.43
9 Month:	$17.53
12 Month:	$17.52

CHEESE:

For the week, blocks slipped 0.25 cent with 39 loads traded. The weekly average price is $1.4740. Barrels remained unchanged with 3 loads traded. The weekly average price is $1.44. Dry whey declined 3.00 cents with 7 loads traded. The weekly average price is 67.75 cents. The dry whey price has declined to the lowest level since March 24th.

BUTTER:

For the week, butter increased 2.50 cents with 72 loads traded. This was fewer than in the past two weeks, but still a substantial amount. The weekly average price is $1.6925. Grade A nonfat dry milk declined 4.50 cents with 27 loads traded. The weekly average price is $2.1160.

OUTSIDE MARKETS SUMMARY:

July corn closed down 7.00 cents per bushel at $4.1750, July soybeans closed down 8.00 cents at $11.2150, and July soybean meal closed down $5.20 per ton at $308.50. July Chicago wheat closed down 1.75 cents at $5.8000. August live cattle closed up $0.13 at $241.65. July crude oil is down $2.84 per barrel at $90.20. The Dow Jones Industrial Average is down 695 points at 50,867, with the NASDAQ down 1,122 points at 25,709.

Friday Midday Dairy Market Summary - Dairy Spot Market Mixed

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$5.00 Lower
LIVE CATTLE:	$0.80 Higher
DOW JONES:	473 Points Lower
NASDAQ:	906 Points Lower
CRUDE OIL:	$2.83 Lower

MIDDAY MARKET UPDATE:

The block cheese price declined 0.75 cents to close at $1.4725 with 3 loads traded. The barrel cheese price remained unchanged at $1.4400 with no loads traded. The dry whey price held steady at 67.00 cents with 2 loads traded. Class III futures are mixed from 7.00 cents lower to 7.00 cents higher. The butter price increased 1.25 cents to close at $1.6925 with no loads traded. There were 25 uncovered offers with the sellers not interested in lowering their prices. Grade A nonfat dry milk fell 6.50 cents to close at $2.0450 with 5 loads traded. Class IV futures are 15-82 cents lower. Butter futures are 1.25 cents lower to 2.92 cents higher. Dry whey futures are 0.02 cent lower to 0.97 cent higher. Cheese futures are 0.60 cent lower to 0.90 cent higher.

Friday Morning Dairy Market Update - Mixed Trade to Dominate

OPENING CALLS:

Class III Milk Futures:	5 to 10 Higher
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	Mixed
Soybean Meal Futures:	Mixed
Wheat Futures:	1 to 2 Higher

MILK:

There is not much to indicate a significant change in the maket anytime soon. The current fundamentals do not suggest much upside price potential unless there is a change in the current balance of supply and demand. Reduced production of American cheese in April did not support the cheese market, as production was sufficient to meet demand. There is little expectation for milk output to slow anytime soon, leaving it up to demand to determine milk prices.

CHEESE:

The block cheese price was higher on Thursday, but there is little expectation for a change in trend. Sellers will take advantage of a price increase to move more supplies to limit inventory at the plant level. Cheese prices are expected to remain in a range through the summer.

BUTTER:

The butter price declined on Thursday, but should hold most of the gains of the past two weeks. Buyers are purchasing what sellers are offering on the spot market. Demand is good, and buyers are purchasing for immediate needs as well as increasing ownership for later demand.