Wednesday Midday Dairy Market Summary - Butter Falls on Heavy Trading

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	3 Lower
SOYBEAN MEAL:	$2.60 Lower
LIVE CATTLE:	$4.00 Higher
DOW JONES:	292 Points Higher
NASDAQ:	342 Points Higher
CRUDE OIL:	$0.35 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 6.25 cents, closing at $1.6025 with two loads traded. The barrel cheese price increased 2.00 cents, closing at $1.57 with no loads traded. The dry whey price increased 0.25 cent to close at 63.00 cents. Class III futures are steady to 18 cents higher. The butter price fell 11.75 cents to close at $2.02 with 21 loads traded. There were 28 unfilled bids and one uncovered offer remaining at the close. Grade A nonfat dry milk decreased 0.75 cent to close at $1.6550 with eight loads traded. Class IV futures are 17-23 cents lower. Butter futures are steady to 6.50 cents lower. Dry whey futures are 0.50 cent lower to 1.50 cents higher. Cheese futures are 0.60-2.30 cents higher. The February Federal Order class prices will be announced today.

Wednesday Morning Dairy Market Update - Follow-Through Strength in Class III Futures

OPENING CALLS:

Class III Milk Futures:	8 to 15 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	2 to 3 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 4 Higher
Soybean Futures:	8 to 10 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	6 to 8 Higher

MILK:

Milk production continues to increase seasonally, but has not yet moved into the spring flush period. The level of production this spring is uncertain, but the milk supply should be handled without difficulty due to increased processing capacity. Both bottling and manufacturing are running on full schedules, with increased milk output moving to manufacturing. The outlook for better milk prices may increase milk production as farmers try to take advantage of the potential for higher prices. Milk production is expected to remain above a year ago, with cow numbers increasing. The February Federal Order class prices will be released Wednesday. The trade estimates the Class III price at $14.91 and the Class IV price at $16.10.

CHEESE:

Cheese prices are expected to be choppy as buyers look to increase ownership of supplies, but may have a price threshold due to increasing cheese production and sufficient supplies.

BUTTER:

Butter continues to show surprising strength for this time of year. Buyers have stepped in aggressively to purchase for increased demand and to build inventory that is currently below that of a year ago. Abundant cream supplies and active churning have not overwhelmed the market supply.

Tuesday Closing Dairy Market Update - Class III and Class IV Futures Diverge

GENERAL OVERVIEW:

Class III and Class IV milk futures diverged Tuesday, with Class III higher and Class IV lower. Class IV traders focused more on the weakness of nonfat dry milk rather than the strength of butter. The February futures and options contracts closed Tuesday with the Federal Order prices announced on Wednesday.

MILK:

Class III futures have been volatile over the past two weeks, but prices in nearby contracts have remained sideways while the August and later contracts make new highs. Class IV futures continue to remain supported by the strong butter price despite the weakness of futures Tuesday. Much of the activity is short-term trading as traders attempt to take advantage of the price swings. Higher prices do allow hedgers to protect significantly better prices than were available a month ago. The February futures and options contracts closed Tuesday with the Federal Order prices announced on Wednesday. The trade estimates a Class III price of $14.91, which would be $0.32 higher than January. The estimate for Class IV is $16.10 and would be $2.55 than in January. The state of Idaho has again become the No. 3 state for milk production in 2025, taking the spot away from Texas.

AVERAGE CLASS III PRICES:

3 Month:	$17.34
6 Month:	$17.83
9 Month:	$18.00
12 Month:	$17.85

CHEESE:

The rebound of the block cheese price keeps the uptrend intact. The upside potential in price may be limited unless the strength of butter leads the market higher. Cheese production is increasing as milk output increases seasonally. Current cheese supplies are sufficient for demand, with little reason for traders to become very aggressive in building inventory.

BUTTER:

Butter futures did not respond to the increase in the spot butter price Tuesday. Futures did not move limit-up on Monday despite the large increase in the spot price. Futures already had much of it factored in with the premium contained in futures. Futures may rise and fall, maintaining seasonal premiums.

OUTSIDE MARKETS SUMMARY:

May corn closed up .75 cent per bushel at $4.4650, May soybeans closed up 6.50 cents at $11.7050, and May soybean meal closed up $1.80 per ton at $314.70. May Chicago wheat closed down 3.25 cents at $5.7400. April live cattle closed up $1.03 at $234.13. April crude oil is up $3.77 per barrel at $75.00. The Dow Jones Industrial Average is down 404 points at 48,501, with the NASDAQ down 232 points at 22,517.