Friday Midday Dairy Market Summary - Further Weakness Develops

OUTSIDE MARKETS SUMMARY:

CORN:	11 Lower
SOYBEANS:	17 Lower
SOYBEAN MEAL:	$1.50 Higher
LIVE CATTLE:	$1.55 Higher
DOW JONES:	435 Points Lower
NASDAQ:	231 Points Higher
CRUDE OIL:	$3.97 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 1.50 cents to close at $1.5550 with five loads traded. The barrel cheese price mirrored the block also with a decline of $1.50, closing at $1.5550 with no loads traded. The dry why price gained a penny to close at 68.50 cents with one load traded. Class III futures are 12 cents lower to 2 cents higher with only September posting a gain. The butter price slipped 0.50 cent to close at $1.6400 with 23 loads traded. There were 17 unfilled bids and 8 uncovered offers remaining at the close of spot trading. Buyer interest is good, but they remain unaggressive as sellers continue to offer supplies. Grade A nonfat dry milk slipped 0.25 cent to close at $2.2725 with one load traded. Class IV futures are 2-9 cents higher. Butter futures are 0.47 cent lower to 2.90 cents higher. Dry whey futures are 0.42 cent lower to 0.25 cent higher. Cheese futures are 0.60 cent lower to 0.60 cent higher.

Friday Morning Dairy Market Update - Milk Futures May Find Little Direction

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Lower
Soybean Futures:	4 to 5 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	5 to 6 Lower

MILK:

The decline in cheese prices on Thursday was a surprise and will increase the caution of traders. It seemed the maket had been finding support with spot prices trading in a tight range. However, Thursday's decline indicates support remains elusive. Continued strong milk output and steady cheese production will keep the market supplied. Schools are closing and will close over the next few weeks, with more milk moving to manufacturing. Milk production provides no indication of slowing anytime soon. Trading activity may be light ahead of spot trading as traders are uncertain whether buyers will step up in the spot market to take advantage of the weakness in cheese or if further weakness may take place if buyers hold back.

CHEESE:

Cheese supplies are sufficient for demand, with increasing milk availability keeping manufacturing strong. Plants may move cheese to the spot market as quickly as possible to keep inventory from building.

BUTTER:

Traders will be cautious over whether the butter price has much further upside potential in the near term. The market has yet to break out of an overall downtrend despite the rebound from the lows two weeks ago. Strong butter production keeps the supply readily available to the market and spot trading activity significant.

Thursday Closing Dairy Market Update - Milk Futures Closed Mixed

GENERAL OVERVIEW:

Steady milk production keeps a sufficient supply for manufacturing, leaving little reason for spot prices to increase. Cheese buyers had no interest in supporting spot prices today. Butter was better but did not generate substantial support in futures.

MILK:

Milk output in the Western region remains stable. There have not been large swings in milk production, leaving a sufficient supply on the spot market. This sufficient supply will keep the upside price potential limited. It was hoped that demand would improve and prices would find support. That may yet take place, but certainly not in the near term. The drop in cheese prices today indicates the markets may remain entrenched in a sideways pattern. The May contracts are mostly priced and will move sideways with limited movement after this week. June Class III futures have been decreasing to eliminate the premium they had contained in anticipation of higher prices. June Class IV futures have been holding as the underlying cash is supporting the market.

AVERAGE CLASS III PRICES:

3 Month:	$17.27
6 Month:	$17.93
9 Month:	$18.06
12 Month:	$17.98

CHEESE:

The substantial decline in the block cheese price was unexpected, as the market had been trading in a tight sideways range. The price has moved down near the bottom of the wider trading range that has been in place since mid-March. Class III futures held well despite the decline as traders continue to do day or short-term trading, reducing the need for substantial liquidation. Demand for spot milk from cheese manufacturers varies depending on location and cheese varieties.

BUTTER:

Buyers were aggressive in the spot butter market, but there is little reason for buyers to remain aggressive for an extended period. At least, the price has not moved down to retest the lows. All the uncovered offers from Wednesday were purchased, and more, with only one offer remaining at the close today. However, this does not mean the market will move higher on Friday. It will depend on who needs to take care of business and how aggressive they will be.

OUTSIDE MARKETS SUMMARY:

July corn closed down 13.25 cents per bushel at $4.6750, July soybeans closed down 36.50 cents at $11.9250, and July soybean meal closed down $6.00 per ton at $332.50. July Chicago wheat closed down 17.50 cents at $6.5800. June live cattle closed down $0.73 at $252.08. June crude oil is up $0.99 per barrel at $102.01. The Dow Jones Industrial Average is up 370 points at 50,063, with the NASDAQ up 233 points at 26,635.