Thursday Closing Dairy Market Update - The Global Dairy Trade Price Gains 1.5%

GENERAL OVERVIEW:

Class III futures were lower in response to the decline in cheese prices, but losses were kept to a minimum. The spot market proved again today that the upside price potential is likely limited for the time being and maybe for much of the rest of the year. The Global Dairy Trade auction increased 1.5 percent.

MILK:

There was hope that the pattern of an increase of a day or two would change, but that was not the case. Spot prices came under pressure as buyers stepped back again. This continues to add to the overall weakness of the Class III market. As long as strong milk production remains, it will be difficult for the market to see much upside. The Global Dairy Trade auction took place earlier this week, with the trade-weighted average increasing 1.5 percent from the previous event. There were 13,743 metric tons sold at an average price of $4,127 per metric ton. Anhydrous milk fat increased 1.1 percent to $6,461 per metric ton or $2.93 per pound. Butter declined 2.6 percent to $5,525 per metric ton or $2.51 per pound. Buttermilk gained 9.0 percent to $3,467 per metric ton or $1.57 per pound. Cheddar cheese declined 3.6 percent to $4,611 per metric ton or $2.09 per pound. Lactose gained 3.7 percent to $1.522 per metric ton or $0.69 per pound. Skim milk powder gained 3.0 percent to $3,547 per metric ton or $1.61 per pound. Whole milk powder gained 2.2 percent at $3,741 per metric ton or $1.70 per metric ton. Mozzarella gained 4.7 percent to $4,010 per metric ton or $1.82 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$17.69
6 Month:	$18.17
9 Month:	$18.18
12 Month:	$18.03

CHEESE:

Reports from the Western region indicate that the peak of spring flush is more sustained this year than usual. This continues to provide plentiful milk supplies for cheese production. The Dairy Products report released on Wednesday showed American cheese output a year earlier, but that has had no impact on supporting cheese prices.

BUTTER:

The sufficient supply of milk and cream available is a broken record, as it has not changed much over quite some time. Butter production continues to run seven days a week as churns utilize the available cream supplies. International demand remains strong as the U.S. price is nearly $0.90 per pound below the world price.

OUTSIDE MARKETS SUMMARY:

July corn closed down 1.00 cent per bushel at $4.6750, July soybeans closed down 2.50 cents at $11.9225 and July soybean meal closed up $1.60 per ton at $318.90. July Chicago wheat closed down 5.00 cents at $6.1225. June live cattle closed down $3.43 at $250.05. June crude oil is up $0.54 per barrel at $95.62. The Dow Jones Industrial Average is down 314 points at 48,597, with the NASDAQ down 33 points at 25,806.

Fluid Milk and Cream - Western U.S. Report 19

Milk production is steady in California. Handlers indicate spring milk production is maintaining good output volumes. Spot milk loads are available. Stakeholders indicate intakes at balancing plants are manageable. 

Farm level milk output is steady in Arizona and New Mexico. However, Arizona manufacturers are bringing in spot milk loads. 

Milk production in the Pacific Northwest is mixed this week. Manufacturers indicate plant managers are receiving contracted milk volumes, but spot milk loads are somewhat tight. Stakeholders convey increases in the weight limit for milk tankers are being considered in Oregon. 

Farm level milk output in the Mountain States of Idaho, Utah, and Colorado is stable. Colorado handlers note there has been more longevity to peak spring output volumes in the state this year. Milk volumes are meeting manufacturer needs in the Mountain States. Class I demands are steady, Class II and III demands vary from steady to stronger, and Class IV demands vary from steady to lighter throughout the region. 

Cream loads are available for spot buyers. Demand varies from lighter to steady. Cream multiples decreased this week. No changes in condensed skim milk availability or demand are reported.

Thursday Midday Dairy Market Summary - Spot Prices Slide Back

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$0.40 Higher
LIVE CATTLE:	$2.60 Lower
DOW JONES:	374 Points Lower
NASDAQ:	72 Points Lower
CRUDE OIL:	$0.87 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 3.00 cents, eliminating the gain on Wednesday. The price closed at $1.63 with 4 loads traded. The barrel price declined 1.50 cents to close at $1.60 with no loads traded. Three uncovered offers moved the price lower. Surprisingly, these offers surfaced as barrels have seen very limited interest for quite some time. The dry whey price slipped 0.50 cent to close at 69.50 cents with no loads traded. Class III futures are holding well with contracts ranging from steady to 16 cents lower. The butter price declined a penny, closing at $1.6300 with no loads traded. There were 3 unfilled bids and 27 uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk increased 0.25 cent to close at $2.2950 with one load traded. Class IV futures are 22 cents lower to 41 cents higher. Butter futures quickly turned lower after the spot price lost strength as the spot price declined. Futures are 2.67 cents lower to 1.52 cents higher. Dry whey futures are 1.00 cents lower to 0.02 cent higher. Cheese futures are 1.10 cents lower to 0.10 cent higher.