Monday Midday Dairy Market Summary - Milk Futures Fail After Significant Movement Overnight

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	5 Higher
SOYBEAN MEAL:	$0.50 Higher
LIVE CATTLE:	$0.82 Higher
DOW JONES:	101 Points Higher
NASDAQ:	132 Points Lower
CRUDE OIL:	$3.93 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 1.50 cents to close at $1.5975 with 10 loads traded. The barrel cheese price remained unchanged at $1.5650 with no loads traded. The dry whey price remained unchanged at 69.00 cents with no loads traded. Class III futures are 17 cents lower to 5 cents higher. The butter rice remained unchanged at $1.8250 with no loads traded. Grade A nonfat dry milk increased 0.75 cent to close at $1.9300 with two loads traded. Class IV futures are 12-21 cents lower with trading confined to the May, June and July contracts. Butter futures are steady to 4.00 cents lower. Dry whey futures are 0.22 cent lower to 1.02 cents higher. Cheese futures are 1.10 cents lower to 0.30 cent higher. USDA will release the February Agricultural Prices report this afternoon.

Monday Morning Dairy Market Update - Overnight Trading Activity Was Impressive

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	MIxed
Soybean Futures:	6 to 9 Higher
Soybean Meal Futures:	$0.50 to $1 Lower
Wheat Futures:	Mixed

MILK:

It was an interesting overnight market for Class III futures. Both the March and April contracts were active, with March showing 185 trades and April showing 237 trades at the time of this writing. This level of activity is rarely seen during overnight trade. Something triggered aggressive buying as the current bids are significantly below the last trades. Someone paid the price when buying the April contract with a market order, as it rose as much as 63 cents at one point. The current offer is 31 cents higher than Friday's close. The opposite was seen in the March contract as the price fell as much as 91 cents this morning, as again an inexperienced trader entered market orders. It is surprising to see the heavy trading activity in the March contract as Tuesday is the last trading day with the March Federal Order prices announced on Wednesday. USDA will release the February Agricultural Prices report Monday, providing most of the prices used in calculating income over feed for the Dairy Margin Coverage program.

CHEESE:

Cheese prices may see further weakness as buyers might have reached a threshold. Cheese output is strong as milk receipts increase at the plant level, and spot milk is available at a discount.

BUTTER:

Butter futures showed trading overnight, which is unusual, but may become more common as increased volatility has dominated the market. Price swings have been substantial as traders react to underlying cash. Butter orders for the Easter season have been met with business being done as usual.

Friday Closing Dairy Market Update - Large Volume of Butter Changes Hands This Week

GENERAL OVERVIEW:

Class IV futures felt the weight of lower spot prices, while Class III futures held up well overall. The block cheese price was unable to find support as had been expected from the cold storage report.

MILK:

Milk production across the country is strong, with some areas reporting they are experiencing the spring flush. Despite increasing production, milk components remain higher than they were this time last year. Bottling demand is variable, depending on the spring break periods for educational institutions. Milk that is being diverted is being handled easily, but has resulted in lower prices on the spot market. Spot milk prices in the Central region are as much as $6 below class. Class III futures closed mixed, with weakness in the spot cheese prices. The April through July contracts were lower, while the rest of the contracts were higher. The July and August contracts made new highs. Traders hold optimism that the weakness of cheese prices will be short-lived and will rebound and resume the uptrend. The potential for higher milk prices will keep milk production stronger than last year.

AVERAGE CLASS III PRICES:

3 Month:	$17.00
6 Month:	$17.81
9 Month:	$18.14
12 Month:	$18.06

CHEESE:

For the week, blocks declined 8 cents with 22 loads traded. The weekly average price is $1.6305. Barrels declined 0.50 cent with two loads traded. The weekly average price is $1.5710. Dry whey gained 3 cents with one load traded. The block price declined to the lowest level since March 16.

BUTTER:

For the week, butter gained 2.50 cents with 120 loads traded. The volume this week exceeded the high volume we saw a few weeks ago. The weekly average price is $1.8155. Grade A nonfat dry milk gained 5.25 cents with 46 loads traded. The weekly average price is $1.9140. Friday showed the first price decline in Grade A nonfat after 15 consecutive days.

OUTSIDE MARKETS SUMMARY:

May corn closed down 5 cents per bushel at $4.6200, May soybeans closed down 14.50 cents at $11.5925, and May soybean meal closed down $6.80 per ton at $315.30. May Chicago wheat closed steady at $6.0500, and June live cattle closed up $3.98 at $238.78. May crude oil is up $6.35 per barrel at $100.83. The Dow Jones Industrial Average is down 333 points at 45,167, with the NASDAQ down 460 points at 20,948.