Monday Morning Dairy Market Update - Traders Begin Week With Caution

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	3 to 4 Lower
Soybean Meal Futures:	$4 to $5 Lower
Wheat Futures:	Mixed

MILK:

Trading volume may be light ahead of spot trading, as the weakness in the spot market on Friday casts a bit of negativity in the market to begin the week. There is some feeling the recent strength in spot prices may have run its course as prices have corrected sufficiently to be in line with supply and demand. Milk production is improving seasonally in many areas, with the market not far from the beginning of the spring flush period. The improved outlook for milk prices will result in a continued push for higher milk production and increased cow numbers. Demand will need to increase to keep pace with increased production, or the supply could exceed demand. The average soybean meal price should be released by the FSA this morning, providing the price to determine income over feed for January.

CHEESE:

The weakness in block cheese on Friday may have indicated buyers have solidified the potential that they have reached a threshold. The weakness may move buyers to the sidelines to see if sellers will be aggressive. It is also possible buyers have purchased what they need for the time being.

BUTTER:

It is difficult to determine if butter has reached a threshold. Significantly lower inventory than a year ago is supportive, but strong butter production and higher milk supplies will keep butter output strong. The price may find a sideways trading range for the near term.

Friday Closing Dairy Market Update - Decline in All-milk Price Indicates DMC Payment Will Be Made

GENERAL OVERVIEW:

Milk futures closed mostly higher, with only the March contracts posting losses. Class III futures posted slight gains for the week, while Class IV contracts posted significant gains.

MILK:

Despite some of the volatility in the spot market, milk futures had a good week. Class III contracts were steady to slightly higher, while Class IV contracts were strong. The April Class IV contract moved to $20.00, where it has not been since May 27, 2025. A move above that level would put in at a new contract high. The strength over the past few weeks has been remarkable. Seasonally, prices do not see this strength during this time of year. However, considering the price moved substantially lower during the fourth quarter of 2025, this may be the market correcting an exceptionally oversold market. The January Agricultural Prices report was released, showing average prices for the month. The average corn price was $4.10 per bushel, the same price as December, but $0.19 below a year ago. The premium/supreme hay price was $226.00 per ton compared to $211.00 per ton in December and $242.00 per ton a year ago. The All-milk price was $17.50, down $1.50 per cwt from December and down $6.60 from January 2025. The average soybean meal price will not be released until Monday, providing the final price to calculate income over feed for the Dairy Margin Coverage program. Other prices of interest are the soybean price for January, which was $10.30 per bushel compared to $10.40 in December and $10.00 a year ago. The alfalfa hay price was $160 per ton, down $1.00 per ton from December and down $1.00 per ton from a year ago.

AVERAGE CLASS III PRICES:

3 Month:	$16.18
6 Month:	$17.09
9 Month:	$17.48
12 Month:	$17.53

CHEESE:

For the week, blocks increased 2.25 cents with 18 loads traded. The weekly average price is $1.5460. Barrels increased 7.00 cents with no loads traded. The weekly average price is $1.5320. Dry whey decreased 4.75 cents with three loads traded. The weekly average price is 64.00 cents.

BUTTER:

For the week, butter decreased 3.00 cents with 68 loads traded. The weekly average price is $1.8320. Grade A nonfat dry milk increased 2.50 cents with eight loads traded. The weekly average price is $1.6775.

OUTSIDE MARKETS SUMMARY:

May corn closed up 5.00 cents per bushel at $4.4850, May soybeans closed up 7.25 cents at $11.7075 and May soybean meal closed down $.40 per ton at $320.50. May Chicago wheat closed up 17.00 cents at $5.9150. April live cattle closed down $4.68 at $232.23. April crude oil is up $2.08 per barrel at $67.29. The Dow Jones Industrial Average is down 521 points at 48,878, with the NASDAQ down 210 points at 22,668.

Friday Midday Dairy Market Summary - Milk Futures Are Higher Despite Lower Spot Prices

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	12 Higher
SOYBEAN MEAL:	$0.80 Lower
LIVE CATTLE:	$4.72 Lower
DOW JONES:	639 Points Lower
NASDAQ:	285 Points Lower
CRUDE OIL:	$1.68 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 0.75 cent to close at $1,.5225 with no loads traded. The barrel cheese price remained unchanged at $1.56 with no loads traded. The dry whey price slipped 0.50 cent to close at 63.25 cents with one load traded. Class III futures are 10 cents lower to 17 cents higher. The March contract shows the only loss across the board. The butter price declined 2.00 cents, closing at $1.84 with 12 loads traded. Grade A nonfat dry milk remained steady at $1.71 with one load traded. Class IV futures are 7 cents lower to 15 cents higher. Butter futures are 2.10 cents lower to 1.02 cent higher. Dry whey futures are 1.00 cents lower to 0.97 cent higher. Cheese futures are 0.5 cents lower to 1.60 cents higher. USDA will release the January Agricultural Prices report this afternoon, with prices used in calculating income over feed for the Dairy Margin Coverage program.