Fluid Milk and Cream - Western U.S. Report 11

California milk production is strong. Handlers indicate milk volumes remain heavy relative to processing capacity, especially in the Central Valley. Spot loads of milk and cream are available. In some cases, buyers are passing up offers from sellers because of the cost of long delivery distances. 

Steady farm level milk output is reported for Arizona. Manufacturers indicate there is some open processing capacity and some spot milk loads being brought into plants. 

Handlers note steady milk production in New Mexico. 

In the Pacific Northwest, handlers convey cow comfort has been better than anticipated in March. Milk production is noted as steady or stronger. Some manufacturers report milk intakes are above anticipated volumes. 

Farm level milk output in the mountain states of Idaho, Utah, and Colorado is steady. Stakeholders indicate spot milk loads are available, but milk volumes are not high compared to production capacity. Class I demand varies from lighter to steady with spring breaks at educational institutions taking place mid-March. Class II demand is steady. Class III and IV demands vary from somewhat lighter to somewhat stronger. 

Condensed skim milk availability is steady and demand is stronger.

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

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	16 Higher
SOYBEAN MEAL:	$3.70 Higher
LIVE CATTLE:	$1.25 Higher
DOW JONES:	594 Points Lower
NASDAQ:	311 Points Lower
CRUDE OIL:	$7.85 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.25 cent to close at $1.5125 with 10 loads traded. The barrel cheese price remained unchanged at $1.5125 with no loads traded. The dry whey price increased a penny to close at 65.00 cents with no loads traded. Class III futures are 3 cents lower to 15 cents higher. The butter price remained steady at $1.8525 with no loads traded. The Grade A nonfat dry milk price jumped 4.25 cents to close at $1.7650 with two loads traded. Class IV futures are 11 cents lower to 29 cents higher. Butter futures are steady to 5.87 cents lower despite the spot butter price remaining steady. Dry whey futures are 0.25-1.25 cents higher. Cheese futures are 0.50 cent lower to 0.80 cent higher.

Thursday Morning Dairy Market Update - Milk Futures Show Evidence of Traders Taking Profits

OPENING CALLS:

Class III Milk Futures:	8 to 15 Higher
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Higher
Soybean Futures:	4 to 10 Higher
Soybean Meal Futures:	$3 to $4 Higher
Wheat Futures:	4 to 6 Higher

MILK:

The strength in the overnight Class III milk contracts might be the result of the spot block cheese and butter price bouncing from the low during spot trading on Wednesday. However, it may be traders liquidating their short positions to take a profit after the recent weakness. Traders continue to trade on a short-term basis by scalping the market if they realize profits. The selling pressure of the past two days was the result of the weaknes in spot butter and cheese prices, but futures may have been overdone to the downside. The seasonal increase in milk production will keep sufficient milk available for bottling and manufacturing.

CHEESE:

Cheese prices may be low enough to stimulate aggressive buying interest. However, without the concern over supply, buyers may continue to hold back and purchase as it is offered to them rather than bidding higher to increase ownership. More milk will find its way to the vat or the spot market over the next few weeks as schools close for spring break. This will not overwhelm the market but will increase availability.

BUTTER:

The bounce of the spot butter price from the low on Wednesday was impressive and provides hope that buyers will be aggressive today. However, butter production is strong, and plants may want to move supplies to the spot market to limit the increase of inventory at the plant level. The price could remain lower and choppy.