Monday Morning Dairy Market Update - Mixed Price Activity Due to Uncertainty

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Lower
Soybean Futures:	15 to 30 Lower
Soybean Meal Futures:	$5 to $7 Lower
Wheat Futures:	7 to 10 Lower

MILK:

Milk futures showed an interesting dynamic in overnight trade. The March and April Class III contracts showed weakness, while the September, October, and November contracts showed strength. Generally, trading is confined to the nearby contracts. The strength in later contracts should not be surprising, as there is the possibility of better milk prices by that time. Seasonally, those are the higher prices of the year. That was not the pattern we saw last year, but there is a good chance it will not be repeated this year. Strong milk production will need increased demand, or the supply will limit upside price potential.

CHEESE:

Cheese prices are expected to remain choppy. Cheese output is increasing, and more milk will be moving to manufacturing as milk receipts increase at the plant level. Milk production is not expected to slow down anytime soon. The current spot prices for milk range from $5.00 below to flat class. This may remain that way moving through the spring flush period.

BUTTER:

The sharp downturn in the butter price last week may increase buyer interest. Demand has improved domestically due to lower prices. Buyers will want to take advantage of the lower price to purchase supplies and freeze them for later use. Ice cream production is beginning to increase. This will increase the demand for cream and reduce the amount available for churning. However, that will not cause concern over a shortage.

Friday Closing Dairy Market Update - Class IV Futures Close at New Contract Highs

GENERAL OVERVIEW:

It was a strong end to the week. Class III futures closed lower for the week while Class IV futures closed higher. The nonfat dry milk price was the leader of the week.

MILK:

Class III futures struggled in the first half of the week with significant losses. The strength of cheese prices on Thursday and today provided the means for a rebound. Although the close looked positive, the upside potential may be limited with prices remaining choppy at best in the near term. Class IV futures had a very positive week with contracts closing significantly higher, with some contracts closing at new contract highs. A winter storm will impact numerous states this weekend with the potential for substantial snow in the upper Midwest. However, that is expected to have a limited impact on milk production. Farm milk pickup may face delays. The delivery of dairy products to retail outlets may be impacted. No impact is expected on milk prices.

AVERAGE CLASS III PRICES:

3 Month:	$16.71
6 Month:	$17.39
9 Month:	$17.72
12 Month:	$17.66

CHEESE:

For the week, blocks declined 8.75 cents with 26 loads traded. The weekly average price was $1.5465. Barrels declined 4.00 cents with one load traded. The weekly average price was $1.5390. Dry whey increased 2.00 cents with one load traded. The weekly average price was 64.60 cents. Buyers reached a threshold on Monday and retreated as they stepped back.

BUTTER:

For the week, butter fell 16.25 cents with 75 loads traded. The weekly average price was $1.8930. Grade A nonfat dry milk gained 8.50 cents with five loads traded. The weekly average price was $1.7280. Trading activity in butter remains strong, with sellers wanting to move supplies rather than build inventory. Increased retail demand is being met easily.

OUTSIDE MARKETS SUMMARY:

May corn closed up 4.75 cents per bushel at $4.6725, May soybeans closed down 2.00 cents at $12.2525, and May soybean meal closed up $2.50 per ton at $322.70. May Chicago wheat closed up 15.25 cents at $6.1375. April live cattle closed down $0.35 at $230.90. April crude oil is up $2.98 per barrel at $98.71. The Dow Jones Industrial Average is down 119 points at 46,558, with the NASDAQ down 2 points at 22,105.

Friday Midday Dairy Market Summary - Spot Nonfat Dry Milk Price Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$1.30 Higher
LIVE CATTLE:	$0.20 Lower
DOW JONES:	16 Points Lower
NASDAQ:	164 Points Lower
CRUDE OIL:	$1.49 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 1.75 cents, closing at $1.5300 with three loads traded. The barrel price increased 1.75 cents, closing at $1.5300 with no loads traded. The dry whey price increased 1.00 cents, closing at 66.00 cents with no loads traded. Class III futures jumped with contracts unchanged to 37 cents higher. The butter price slipped 0.50 cent, closing at $1.8475 with seven loads traded. Grade A nonfat dry milk remained unchanged at $1.7650 with no loads traded. Class IV futures are steady to 43 cents higher, with the May contract moving to $20.15 and a new contract high. Butter futures are mixed, ranging from 5.00 cents lower to 0.65 cent higher. Dry whey futures are 0.25-0.50 cent higher. Cheese futures are 0.30 cent lower to 4.20 cents higher.