Wednesday Morning Dairy Market Update - Class III Futures Show Weakness in Overnight Trade

OPENING CALLS:

Class III Milk Futures:	2 to 6 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The Class III market remains under pressure and may remain that way for an extended period of time. Strong milk production, continued expansions, and increased cow numbers will keep milk output higher than a year ago. More milk is moving to the cheese vat with schools closed. This is increasing cheese production and availability. Class IV futures may remain strong as butter may be supported and trending higher. The May Federal Order class prices will be released Wednesday. The trade anticipates a Class III price of $16.91 and a Class IV price of $22.36.

CHEESE:

Sellers of cheese continue to offer supplies to the spot market to move increased production and limit building inventory. Even though a significant volume of blocks has come to the spot market over the past two days, buyers have been willing to purchase them rather than hold for lower prices. Higher output may be met with increased demand.

BUTTER:

Buyers have needed to step up to purchase due to increased immediate demand, and are also turning their attention to upcoming demand through the rest of the year. If both domestic and international demand remain strong, buyers will need to increase ownership to build inventory for later in the year. This may continue to support the price.

Tuesday Closing Dairy Market Update - Global Dairy Trade Auction Declined 0.6%

GENERAL OVERVIEW:

Class III futures were mixed with Class IV futures lower. The butter price has increased for seven consecutive days. June futures contracts are now the lead month. The Global Dairy Trade auction was down 0.6 percent.

MILK:

Class III milk futures did not do much today, closing mixed as cheese prices remained steady while dry whey declined. Class IV futures closed lower as contracts already had the increases in spot butter and nonfat dry milk prices factored in. The Global Dairy Trade auction took place today, with the trade-weighted average declining 0.6 percent. There were 14,364 metric tons of products sold at an average price of $4,021 per metric ton. Anhydrous milk fat increased 5.3 percent to $6,668 per metric ton or $3.02 per pound. Butter increased 1.2 percent to $5,734 per metric ton or $2.60 per pound. Buttermilk powder increased 3.0 percent to $3,578 per metric ton or $1.62 per pound. Cheddar cheese increased 1.8 percent to $4,621 per metric ton or $2.10 per pound. Lactose increased 4.6 percent to $1,608 per metric ton or $0.73 per pound. Skim milk powder decreased 3.0 percent to $3,457 per metric ton or $1.57 per pound. Whole milk powder decreased 2.2 percent to $3,706 per metric ton or $1.68 per pound. Mozzarella decreased 4.6 percent to $3,942 per metric ton or $1.79 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$16.75
6 Month:	$17.47
9 Month:	$17.55
12 Month:	$17.53

CHEESE:

The buyers and sellers of cheese seem to be comfortable with the current price levels. Spot trading activity in blocks has increased significantly this week. The positive aspect is that it has not pressured the price. Buyers are willing to purchase and have not stepped away from the market. It is unclear whether this could be a change in attitude resulting in a change in trend.

BUTTER:

It seems as if butter has broken the pattern of gains for a few days, followed by greater weakness. The spot price has increased for 6 consecutive days with a gain of 19 cents. The price has increased to the highest level since April 21st. Buyers are buying to meet increased demand and to increase ownership for later demand.

OUTSIDE MARKETS SUMMARY:

July corn closed down 3.50 cents per bushel at $4.4050, July soybeans closed down 15.50 cents at $11.6525, and July soybean meal closed down $.30 per ton at $326.20. July Chicago wheat closed down 5.75 cents at $6.0300. August live cattle closed down $0.95 at $239.65. July crude oil is up 1.25 per barrel at $93.41. The Dow Jones Industrial Average is up 229 points at 51,308, with the NASDAQ up 7 points at 27,094.

Tuesday Midday Dairy Market Summary - Butter Climbs Higher

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	14 Lower
SOYBEAN MEAL:	$0.80 Higher
LIVE CATTLE:	$1.50 Lower
DOW JONES:	150 Points higher
NASDAQ:	12 Points Higher
CRUDE OIL:	$1.49 Higher

MIDDAY MARKET UPDATE:

Both the block and barrel cheese prices closed steady at $1.4750 and $1.4400 respectively. There were 15 loads of blocks traded and 2 loads of barrels. There were 5 unfilled bids for blocks and 2 uncovered offers remaining at the close of spot trading. The dry whey price declined 1.75 cents, closing at 67.75 cents with 2 loads traded. Class III futures range from 13 cents lower to 8 cents higher. The butter price increased 4.00 cents to close at $1.71 with 23 loads traded. There were 22 unfilled and 21 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 2.0 cents to close at $2.15 with 6 loads traded. Class IV futures are 15 cents lower to 7 cents higher. The increase in spot prices was already factored in, leaving futures mixed. Butter futures are steady to 2.97 cents higher. Dry whey futures are 0.15--0.75 cent higher. Cheese futures have not yet been traded. Today is the last day to trade May futures and options with the Federal Order class prices to be announced on Wednesday.