Tuesday Closing Dairy Market Update - GDT Trade-weighted Average Increases 0.1%

GENERAL OVERVIEW:

Milk futures closed higher following the strength of cheese and nonfat dry milk. The Global Dairy Trade auction trade-weighted average increased 0.1% from the previous event. This was the sixth consecutive increase in the event.

MILK:

The June through November Class III contracts are above $18.00 with the July through November near the mid-$18.00 level. Class IV futures showed April through June contracts above $20.00. This has again improved the outlook for milk prices. However, caution must be exercised as the increases in spot prices have met with resistance at higher prices. Milk production is improving seasonally, and the hope is that demand will increase as well. The Global Dairy Trade auction showed the sixth consecutive increase with a gain today of 0.1%. The average price was $4,330 per metric ton with 19,500 metric tons sold. The Anhydrous milk fat price increased 6.4% to $7,602 per metric ton or $3.45 per pound. The butter price decreased 0.9% to $6,868 per metric ton or $3.12 per pound. There must have been an adjustment made to the price on the previous event, as it was initially reported at $3.05 per pound. Cheddar cheese increased 0.1% to $4,125 per metric ton or $2.23 per pound. Lactose decreased 0.3% to $1.450 per metric ton or $0.66 per pound. Skim milk powder increased 5.2% to $3,409 per metric ton or $1.55 per pound. Whole milk powder decreased 4.0% to $3,709 per metric ton or $1.68 per pound. Mozzarella increased 0.5% to $4,208 per metric ton or $1.91 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$16.99
6 Month:	$17.72
9 Month:	$17.99
12 Month:	$17.88

CHEESE:

The block cheese price is trying to work back up to the high of last week. Spot trading activity has been limited, with sellers either reluctant to offer supplies on the spot market or waiting for higher prices to move supplies. Most cheese plants are running full schedules due to increasing milk receipts. Spot milk is running as much as $5.00 below class. Inventory is increasing seasonally.

BUTTER:

Buyers and sellers seem comfortable doing business at the current price level. Sellers have butter to sell while buyers see value in purchasing at the current price. Butter inventory is increasing, but the increase may not be as much as last year.

OUTSIDE MARKETS SUMMARY:

May corn closed steady at $4.5400, May soybeans closed up 1.75 cents at $11.5700, and May soybean meal closed down $.50 per ton at $311.70. May Chicago wheat closed down 7.50 cents at $5.8975. April live cattle closed up $1.98 at $235.23. April crude oil is up $2.53 per barrel at $96.03. The Dow Jones Industrial Average is up 47 points at 46,993, with the NASDAQ up 105 points at 22,480.

Tuesday Midday Dairy Market Summary - Milk Futures Show Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	3 Higher
SOYBEAN MEAL:	$0.80 Lower
LIVE CATTLE:	$1.45 Higher
DOW JONES:	155 Points Higher
NASDAQ:	97 Points Higher
CRUDE OIL:	$2.25 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 3.00 cents, closing at $1.59 with no loads traded. There were six unfilled bids, with no uncovered offers. The barrel cheese price increased 1.00 cents, closing at $1.54 with no loads traded. There was one unfilled bid and no uncovered offer remaining. The dry whey price remained unchanged at 66.00 cents with no loads traded. Class III futures are unchanged to 25 cents higher. The butter price remained steady at $1.85 with 17 loads traded. There were five unfilled bids and five uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 0.50 cent to close at $1.80 with one load traded. Class IV futures are 16 cents lower to 20 cents higher. Butter futures are taking a beating, ranging from 0.15-4.00 cents lower. Dry whey futures are 0.25-0.75 cent higher. Cheese futures are 0.10 cent lower to 2.00 cents higher.

Tuesday Morning Dairy Market Update - Overnight Trade Shows Optimism

OPENING CALLS:

Class III Milk Futures:	10 to 15 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 12 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	Steady to 1 Higher

MILK:

Class III milk futures posted mostly double-digit gains overnight. The expectation for future strength in spot cheese may be influencing trader buying interest. Volume is good for overnight activity. However, rather than a change in the market direction, it may maintain a choppy market. It would be surprising to see sustained strength in spot cheese and butter prices as milk production increases seasonally. The Class IV price is another story, as strong support stems from demand for nonfat dry milk. Futures have recovered their recent losses and are poised to resume the uptrend.

CHEESE:

Spot cheese prices may find strength, but it may be limited. Higher cheese production should keep a sufficient supply readily available for demand and also increase inventory. Inventory seasonally increased during the first half of the year.

BUTTER:

The butter price is low enough to generate buying interest, but the buyers may not be as aggressive as they have been. The high volume of loads on the spot market may have allowed buyers to build a supply cushion that may leave them less aggressive moving forward. However, lower retail prices have improved consumer demand.