Wednesday Closing Dairy Market Update - March Class III Price Is $16.16

GENERAL OVERVIEW:

Class III and Class IV futures diverged for a second consecutive day, with Class III contracts higher and Class IV lower. The March Federal Order class prices were significantly higher than in February.

MILK:

Class III milk futures posted double-digit gains in numerous contracts today in response to the increase in the block cheese price. The October contract established a new high and nearly reached $19.00. Class IV contracts moved in the opposite direction due to further weakness in butter and nonfat dry milk. Milk production is seasonally strong, with most reporting they are experiencing a spring flush. The March Federal Order class price was released today, showing significant increases from February. The Class II price is $17.34, an increase of $2.00 from February. The Class III price is $16.16, up $1.22 from February. The Class IV price is $18.94, up $2.65 from February. USDA will release the February Dairy Products report on Thursday. The report provided the volume of dairy products produced for the month. It is expected to show increased production from February 2025.

AVERAGE CLASS III PRICES:

3 Month:	$17.93
6 Month:	$18.42
9 Month:	$18.49
12 Month:	$18.27

CHEESE:

Spot milk availability is increasing, with some cheese plants reporting that they are receiving additional offers for milk. Some plants are unable to utilize extra milk supplies as milk receipts from patrons are increasing. Some milk is being diverted due to facility maintenance. This has resulted in spot milk being priced from $2.00 to as much as $7.00 below class. Domestic cheese demand is reported as steady.

BUTTER:

Many butter churns are operating seven days a week but are not running at full capacity. Ice cream production is increasing, resulting in a little less volume of cream being available for churning. The supply of cream is not tight, but it is not as abundant as it has been. Butter supplies are sufficient for demand, with manufacturers moving any extra product as quickly as possible rather than building plant inventory.

OUTSIDE MARKETS SUMMARY:

May corn closed down 3.50 cents per bushel at $4.5425, May soybeans closed down 2.50 cents at $11.6850, and May soybean meal closed up $1.80 per ton at $318.20. May Chicago wheat closed down 18.75 cents at $5.9750. June live cattle closed up $1.08 at $244.35. May crude oil is down $2.06 per barrel at $99.32. The Dow Jones Industrial Average is up 224 points at 46,566, with the NASDAQ up 250 points at 21,841.

Wednesday Midday Dairy Market Summary - Block Cheese Shows Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$1.70 Higher
LIVE CATTLE:	$0.60 Higher
DOW JONES:	437 Points Higher
NASDAQ:	389 Points Higher
CRUDE OIL:	$2.16 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 2.25 cents, closing at $1.6375 with 2 loads traded. The barrel cheese price remained unchanged at $1.5925 with no loads traded. There were 3 unfilled bids in blocks and 1 unfilled bid in barrels, with no remaining offers in either at the close of spot trading. The dry whey price slipped 0.25 cent to close at 68.75 cents with no loads traded. Class III futures are 3 cents lower to 27 cents higher. Butter showed further weakness, posting a decline of 2.25 cents to $1.7525 with 14 loads traded. Butter remains unable to find support as sellers continue to move supplies even at reduced prices. Grade A nonfat dry milk slipped 0.25 cent to close at $1.9375 with no loads traded. Class IV futures are 17 cents lower to 2 cents higher. Butter futures are 1.00-3.87 cents lower. Dry whey futures are 0.02 cent lower to 0.65 cent higher. Cheese futures are 0.30 cent lower to 2.40 cents higher. The March Federal Order class prices will be announced Wednesday afternoon.

Wednesday Morning Dairy Market Update - Overnight Trade Shows Renewed Optimism

OPENING CALLS:

Class III Milk Futures:	4 to 8 Higher
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Lower
Soybean Futures:	5 to 7 Lower
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	11 to 14 Lower

MILK:

The nearby Class III contracts remain choppy while later contracts continue to make new highs. The optimism over higher prices as the year progresses may be fueled by increased dairy product production and the inability to rebuild inventory. USDA will release the February Dairy Products report on Thursday. Milk production is increasing as the spring flush unfolds. However, no difficulty is expected handling the increased milk supply. The potential for higher milk prices, as indicated by milk futures, will keep milk production strong and cow numbers increasing.

CHEESE:

Cheese prices are maintaining an overall uptrend, with the price increase on Tuesday keeping the trend intact. Cheese output has been increasing, but demand has so far been keeping pace. This resulted in the February total cheese inventory being below that of a year ago. There is no concern of a supply tightness. Buyers are purchasing for immediate demand and to build inventory.

BUTTER:

It is uncertain as to where the level of support for the butter price will be. The weakness on Tuesday was surprising, as butter demand is strong, with support expected to have been reached last week. It certainly is a buyer's market as they can purchase a substantial amount of butter at lower prices. This may limit the upside price potential later this year.