Friday Closing Dairy Market Update - Fundamentals Limit Price Potential

GENERAL OVERVIEW:

Milk futures closed steady to higher, except for the nearby January contract. There was no reason for Class III futures to close higher. The strength was the result of short covering ahead of the weekend.

MILK:

Some thought has developed that the release of the new dietary guidelines might provide support for dairy prices. That is not very likely due to the current market fundamentals. It will take more than moving the recommendation for dairy to the top of the food pyramid to tighten the supply. It may improve consumption but not provide support to the market due to the supply being more than demand. The market will need a change in numerous areas before there will be a noticeable change in supply and demand. The strength in Class III futures earlier today was the result of short covering due to the weakness of the previous two days. That has been the pattern. A few days of weakness will result in short covering. A few days of strength will result in long liquidation as traders take advantage of the volatility to scalp the market for a small profit. This has been the pattern for a while and may continue to be the pattern for a while longer.

AVERAGE CLASS III PRICES:

3 Month:	$15.11
6 Month:	$15.71
9 Month:	$16.30
12 Month:	$16.60

CHEESE:

For the week, blocks fell 7.50 cents with 33 loads traded. The weekly average price is $1.3420. Barrels remained unchanged with no loads traded. The weekly average price is $1.40. Dry whey declined 2.50 cents with two loads traded. The weekly average price is 70.80. The block price increased on Wednesday but declined for the rest of the week as manufacturers wanted to move supply to the market rather than hold it in inventory.

BUTTER:

For the week, butter fell 7.50 cents with 62 loads traded. The weekly average price is $1.3250. Grade A nonfat dry milk jumped 9.00 cents with 18 loads traded. The nonfat dry milk price jumped 9 cents over the past five trading days. This moves the price to the highest level since August 19, 2025.

OUTSIDE MARKETS SUMMARY:

March corn closed down .25 cent per bushel at $4.4575, March soybeans closed up 1.25 cents at $10.6250, and March soybean meal closed up $.10 per ton at $303.70. March Chicago wheat closed down .75 cent at $5.1725. February live cattle closed down $1.55 at $233.73. February crude oil is up 1.36 per barrel at $59.12. The Dow Jones Industrial Average is up 238 points at 49,504, with the NASDAQ up 191 points at 23,671.

Friday Midday Dairy Market Update - Class III Futures Show Higher Prices From Short-Covering

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$1.20 Higher
LIVE CATTLE:	$1.97 Lower
DOW JONES:	248 Points Higher
NASDAQ:	204 Points Higher
CRUDE OIL:	$1.54 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 1.50, closing at $1.3150 with two loads traded. There were two unfilled bids and one uncovered offer remaining at the close. The barrel cheese price remained unchanged at $1.40 with no loads traded and no bids or offers posted. The dry whey price remained unchanged at 70.00 cents with no loads traded. Class III futures are 6 cents lower to 12 cents higher. Futures have fallen back from their highs due to the weakness of blocks, but still retain gains as traders have covered short positions ahead of the weekend. The butter price slipped 0.25 cent to close at $1.30 with two loads traded. Grade A nonfat dry milk gained 1.75 cents to close at $1.2650 with five loads traded. This is the highest price since Aug. 19, 2025. Class IV futures have not yet been traded. Butter futures are 0.60 lower to 2.00 cents higher. Dry whey futures are 0.75 cent lower to 1.00 cents higher. Cheese futures are 0.50 cent lower to 0.40 cent higher.

Friday Morning Dairy Market Update - Still No Light at End of Tunnel

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	5 to 6 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	Steady to 1 Lower

MILK:

If the pattern remains intact, milk futures could rebound Friday as traders might cover their sold positions of the past two days to take some profits ahead of the weekend. There is little indication of a change in fundamentals that would result in the market trending higher. The beef-on-dairy calf market is strong and will remain that way for a time. This will continue to limit culling unless the milk price declines further, with lower-producing cows being culled to reduce feed expenses. It appears strong milk output will continue to provide for bottling and manufacturing needs and then some, keeping milk prices low.

CHEESE:

The barrel market continues to see little interest in the spot market, with business being done in the country. The steady barrel price does not influence the block price. The continued weakness of blocks will result in the barrel price adjusting lower. The current cheese production is outpacing demand.

BUTTER:

The price has not found a bottom, and lower prices are likely to develop. Manufacturers are putting some butter into storage but are limiting the amount moving to inventory by selling it on the spot market. A high volume of loads continues to trade on the daily spot market as sellers are moving supplies, even if lower offers are needed to entice buyers.