Tuesday Morning Dairy Market Update - Weakness May Prevail

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

There is not much to be said about the milk market as the fundamentals remain the same. It seems continued strong milk production is fully impacting the market. The weakness of the past week has been substantial and has eliminated a lot of value. The milk supply will need to tighten due to an increase in demand before milk futures may find support. We have seen counter-seasonal movement since last fall, but will we see it through the spring flush season? The current market fundamentals do not suggest this will be the case. The movement of milk futures over the past week dims the outlook for prices for the year.

CHEESE:

Cheese prices are expected to remain in a range. Cheese production has increased due to high milk receipts. This will continue as milk production is expected to exceed last year throughout the rest of the year. It is uncertain whether demand will hold due to higher prices for all food and other goods, as consumers have less buying power.

BUTTER:

Butter demand is good, but not good enough to tighten the supply. Strong butter production due to the abundance of cream and milk is keeping the market well supplied. International demand has been strong and is expected to remain strong, but that is not enough to tighten the supply. The market has yet to find support.

Monday Closing Dairy Market Update - Milk Futures Post Double-digit Losses

GENERAL OVERVIEW:

It was another day of pressure on milk futures. Weaknesses in the spot prices eliminated further premiums that the market contained. Fundamental support is difficult to find at present.

MILK:

Traders are wondering just how far spot prices may decline before prices are low enough to generate aggressive buying interest. The heavy milk production keeps a sufficient supply available for bottling and manufacturing. Milk production is expected to remain heavy through the spring flush and potentially after, due to increased cow numbers and production per cow. USDA will release the Dairy Products report on Wednesday, which is expected to show higher output of dairy products compared to a year ago. However, even with higher production, inventory remains below that of a year ago. Buyers are not concerned, as the outlook is for a sufficient milk supply for demand.

AVERAGE CLASS III PRICES:

3 Month:	$17.33
6 Month:	$17.93
9 Month:	$17.98
12 Month:	$17.89

CHEESE:

The block cheese price remains entrenched in a sideways pattern and may remain in that range for an extended time. Increased cheese output due to strong milk production will continue. It will be up to demand to tighten the supply and increase prices. However, buyers have been purchasing cheese for immediate demand and increasing ownership for later demand.

BUTTER:

Buyers continue to hold back and are purchasing supplies on price weakness. They see no need to be aggressive as long as sellers continue to offer butter on the spot market. The price has not declined as quickly as it increased in January and February, but it has fallen steadily. Low prices have yet to increase buyer interest.

OUTSIDE MARKETS SUMMARY:

July corn closed up 5.50 cents per bushel at $4.8575, July soybeans closed up 19.50 cents at $12.2275 and July soybean meal closed up $1.60 per ton at $320.90. July Chicago wheat closed up 3.25 cents at $6.4100. June live cattle closed down $1.25 at $251.75. June crude oil is up $3.18 per barrel at $105.12. The Dow Jones Industrial Average is down 557 points at 48,942, with the NASDAQ down 47 points at 25,068.

Monday Midday Dairy Market Summary - Butter Continues to Decline

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	22 Higher
SOYBEAN MEAL:	$1.80 Higher
LIVE CATTLE:	$2.10 Lower
DOW JONES:	520 Points Lower
NASDAQ:	114 Points Lower
CRUDE OIL:	$4.16 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 0.75 cent to close at $1.6325 with three loads traded. The barrel cheese price remained unchanged at $1.6150 with no loads traded. The dry whey price slipped 0.25 cent to close at 69.50 with no loads traded. Class III futures are 6-15 cents lower. The butter price declined 4.00 cents to close at $1.5550 with two loads traded. The price initially declined 4.25 cents, but it bounced up from the low. This is the lowest price since Jan. 28. Grade A nonfat dry milk remained steady at $2.6225 with three loads traded. The price initially declined by 0.25 cent, but rebounded from that level. Class IV futures are steady to 13 cents higher. Butter futures are 1.00-6.50 cents lower. Dry whey futures are 0.62-1.75 cents lower. Cheese futures are 1.00 cents lower to 0.10 cent higher.