Wednesday Morning Dairy Market Update - Lackluster Day Trade Brings Sleepy Overnight Trade

OPENING CALLS:

Class III Milk Futures:	3 to 10 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	4 to 5 Lower

MILK:

Milk futures are looking for direction as most major headlines in the dairy sector have already been factored into the pricing equation. More headaches are expected to come as the war with Iran has had a trickle effect on our markets. Fuel cost and overall cost of living is increasing, leaving little extra funds for nights out on the town as restaurants or large family get togethers to bake for. The school year is winding down for lunch milk consumption but the outlook for next year is still good with the new school dietary guidelines coming.

CHEESE:

Spot cheese prices were weaker Tuesday with blocks trading 0.75 cents lower and barrels unchanged. Dry whey is the shining start lately but remainded unchanged on Tuesday's trade.

BUTTER:

The spot butter price was the only bright spot in the cash trade Tuesday, giving a surprising boost to Class IV prices after increasing 4.5 cents with 23 loads traded. The volume gave butter prices a nice rally, finally able to pull its weight in the Class IV equation, where Grade A Nonfat Dry Milk has been doing all the heavy lifting as of late. It too increased 0.75 cents with no end in sight for this historic rally. 

Tuesday Closing Dairy Market Update - High Fuel Prices May Limit Price Potential

GENERAL OVERVIEW:

There was nothing extraordinary that took place during spot trading. Butter showed the most movement, but it was within the confines of what the market has shown previously.

MILK:

Class III milk futures have held surprisingly well despite the minor weakness in the block cheese price. There is an optimism that cheese prices will hold or potentially improve, but that will be up to continued strong demand. There has been concern raised over the reports of consumer demand for goods and services showing signs of weakness. The high fuel prices and the impact they are having on prices for most everything have resulted in consumers curtailing some of their usual activities. Restaurants are reporting slower traffic. The food service industry is an important part of dairy demand. The increased cost of trucking and shipping is being passed on to consumers who are making adjustments. Continued high fuel prices will have an impact on the price potential of dairy products.

AVERAGE CLASS III PRICES:

3 Month:	$17.45
6 Month:	$18.12
9 Month:	$18.29
12 Month:	$18.09

CHEESE:

The cheese price is not holding the Class III price up to the level of futures. The dry whey price is providing substantial support. One year ago, the dry whey price was 46.50 cents. The current price is 24.50 cents above a year ago. This adds $1.47 to the Class III price. Each one-cent move in the dry whey price equals a six-cent move in the Class III price calculation.

BUTTER:

The strong support in Class IV futures stems from the strength of Grade A nonfat dry milk. The spot Grade A nonfat dry milk price is at a record high with no sign of price resistance from buyers. The price has increased by 96.50 cents since Jan. 2. The May and June Class IV futures are solidly above $21.00. The price will eventually find a level of resistance at which demand destruction will take place, and end users will find alternatives.

OUTSIDE MARKETS SUMMARY:

May corn closed up 2.75 cents per bushel at $4.4300, May soybeans closed down 4.25 cents at $11.5800, and May soybean meal closed down $2.20 per ton at $329.70. May Chicago wheat closed up 9.75 cents at $5.9200. June live cattle closed up $2.90 at $251.43. May crude oil is down $7.27 per barrel at $91.81. The Dow Jones Industrial Average is up 318 points at 48,536, with the NASDAQ up 455 points at 23,639.

Tuesday Midday Dairy Market Summary - Butter Finds Buying Interest

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$2.00 Lower
LIVE CATTLE:	$2.07 Higher
DOW JONES:	255 Points Higher
NASDAQ:	397 Points Higher
CRUDE OIL:	$6.52 Lower

MIDDAY MARKET UPDATE:

The block cheese price decreased 0.75 cent to close at $1.5750 with four loads traded. The barrel cheese price remained unchanged at $1.5750 with no loads traded. The dry whey price remained unchanged at 71.00 cents with no loads traded. Class III futures were mixed after spot trading was finished, but slowly began to uncover buying interest, leaving only the April contract in negative territory. Futures trading volume remains light. The butter price increased 4.50 cents to close at $1.79 with 23 loads traded. Grade A nonfat dry milk increased 0.75 cent to close at $2.14 with one load traded. The market has yet to find buyer resistance. Class IV futures are 20-40 cents higher. Butter futures are 0.50 cent lower to 2.82 cents higher. Dry whey futures are 0.07 cent lower to 0.75 cent higher. Cheese futures are 0.80 cent lower to 0.80 cent higher.