Tuesday Closing Dairy Market Update - GDT Declines 1.0%

MILK:

There had been early hope of cheese prices being low enough to increase the buying interest in cheese, but such was not the case. Class III futures did not see the pressure that would have generally been placed on futures with the spot price declines, but losses were seen. There was little for traders to get excited over, leaving trading volume moderate. The Global Dairy Trade auction took place with the trade-weighted average declining 1.0% from the previous event. The average price was $4,389 per metric ton with 15,209 metric tons sold. Anhydrous milk fat declined 1.3% to $7,276 per metric ton or $3.30 per pound. Butter increased 1.4% to $7,890 per metric ton or $3.58 per pound. Cheddar cheese increased 5.1% to $4,992 per metric ton or $2.26 per pound. Lactose declined 3.6% to $1.323 per metric ton or $0.60 per pound. Mozzarella declined 1.9% to $ 4,802 per metric ton or $2.18 per pound. Skim milk powder declined 1.3% to $2,775 per metric ton or $1.26 per pound. Whole milk powder declined by 2.1% to $4,084 per metric ton or $1.85 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$18.42
6 Month:	$18.67
9 Month:	$18.60
12 Month:	$18.50

CHEESE:

Cheese prices continue to erode as sellers want to move supply rather than hold it for later and risk paying storage costs without being able to recover those costs. That gives the impression that there could be limited upside price potential. Higher cheese output will keep the market supplied, demand met, and inventories built for later demand. Buyers continue to hold back, letting the sellers come to their lower prices.

BUTTER:

The weakness of butter today may be short-lived as international demand remains strong due to the U.S. price being low compared to the world price. Export demand so far this year has been running 180% ahead of the same period last year. Buyers have been increasingly aggressive as they want to increase ownership of supply in case the market tightens as the year progresses.

Outside Markets Summary:

July corn closed down 3.25 cents per bushel at $4.3150, July soybeans closed up 4.25 cents at $10.7400 and July soybean meal closed up $1.40 per ton at $285.10. July Chicago wheat closed up 12.50 cents at $5.4900. August live cattle closed down $4.90 at $210.65. July crude oil is up $3.30 per barrel at $75.07. The Dow Jones Industrial Average is down 299 points at 42,216, with the NASDAQ down 180 points at 19,521.

Tuesday Midday Dairy Market Summary - Still No Bottom in Cheese

OUTSIDE MARKETS SUMMARY:

CORN:	2 Lower
SOYBEANS:	3 Higher
SOYBEAN MEAL:	$1.40 Higher
LIVE CATTLE:	$2.92 Lower
DOW JONES:	148 Points Lower
NASDAQ:	99 Points Lower
CRUDE OIL:	$2.14 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 2.50 cents, closing at $1.7550 with 13 loads traded. There were seven unfilled bids and three uncovered offers remaining at the close of spot trading. This could suggest a balanced market, but it does not indicate the price has found a bottom. The barrel cheese price declined by 2 cents, closing at $1.77 with one load traded. There were two unfilled bids and no offers. The dry whey price increased 0.50 cent, closing at 55.25 with no loads traded. Class III futures are mixed from 6 cents lower to 19 cents higher. The butter price declined 1.50 cents, closing at $2.5775 with five loads traded. Grade A nonfat dry milk declined 0.50 cent, closing at $1.2650 with one load traded. Class IV futures have only traded in the March contract at 8 cents lower. Butter futures are 0.50 to 3.22 cents lower. Dry whey futures are 0.50 cent lower to 0.55 cent higher.

Tuesday Morning Dairy Market Update - Traders Look for Bullish News

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	5 to 10 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	Mixed
Soybean Meal Futures:	Steady to $1 Higher
Wheat Futures:	2 to 3 Higher

MILK:

The spot cheese market will need to prove itself before traders will be interested in buying Class III futures. Cheese prices have not found a level to trigger the buying interest in the spot market. Increased cheese production with more milk moving to manufacturing has resulted in greater interest in moving supply to the market rather than building supply at the plant level. Milk production has been holding strong after the spring flush peak, keeping sufficient milk available for bottling and manufacturing demand. The recent weakness of milk futures is dimming the price outlook for now, but it will not impede milk output as dairy farms will continue to push milk production for cash flow. Stalls are being kept full and feed prices are reasonable.

CHEESE:

Cheese has yet to find a bottom. It seems as if prices have fallen apart, but it has not been that long ago that prices were at the current levels. In the middle of March, cheese prices were about 20 cents lower than they currently are. The weakness is not as devastating as it feels, but there is hope prices will soon find a bottom.

BUTTER:

The butter price is following a seasonal direction and a pattern similar to 2023. The price remained in a range during the first half of that year and then moved to a record high over a three-month period. The fundamentals are not the same, but there are similarities in pattern. Churning is active, but cream supplies are not as abundant as they had been.