Friday Closing Dairy Market Update - Large Volume of Butter Changes Hands This Week

GENERAL OVERVIEW:

Class IV futures felt the weight of lower spot prices, while Class III futures held up well overall. The block cheese price was unable to find support as had been expected from the cold storage report.

MILK:

Milk production across the country is strong, with some areas reporting they are experiencing the spring flush. Despite increasing production, milk components remain higher than they were this time last year. Bottling demand is variable, depending on the spring break periods for educational institutions. Milk that is being diverted is being handled easily, but has resulted in lower prices on the spot market. Spot milk prices in the Central region are as much as $6 below class. Class III futures closed mixed, with weakness in the spot cheese prices. The April through July contracts were lower, while the rest of the contracts were higher. The July and August contracts made new highs. Traders hold optimism that the weakness of cheese prices will be short-lived and will rebound and resume the uptrend. The potential for higher milk prices will keep milk production stronger than last year.

AVERAGE CLASS III PRICES:

3 Month:	$17.00
6 Month:	$17.81
9 Month:	$18.14
12 Month:	$18.06

CHEESE:

For the week, blocks declined 8 cents with 22 loads traded. The weekly average price is $1.6305. Barrels declined 0.50 cent with two loads traded. The weekly average price is $1.5710. Dry whey gained 3 cents with one load traded. The block price declined to the lowest level since March 16.

BUTTER:

For the week, butter gained 2.50 cents with 120 loads traded. The volume this week exceeded the high volume we saw a few weeks ago. The weekly average price is $1.8155. Grade A nonfat dry milk gained 5.25 cents with 46 loads traded. The weekly average price is $1.9140. Friday showed the first price decline in Grade A nonfat after 15 consecutive days.

OUTSIDE MARKETS SUMMARY:

May corn closed down 5 cents per bushel at $4.6200, May soybeans closed down 14.50 cents at $11.5925, and May soybean meal closed down $6.80 per ton at $315.30. May Chicago wheat closed steady at $6.0500, and June live cattle closed up $3.98 at $238.78. May crude oil is up $6.35 per barrel at $100.83. The Dow Jones Industrial Average is down 333 points at 45,167, with the NASDAQ down 460 points at 20,948.

Friday Midday Dairy Market Summary - Spot Prices Declined

OUTSIDE MARKETS SUMMARY:

CORN:	6 Lower
SOYBEANS:	16 Lower
SOYBEAN MEAL:	$5.20 Lower
LIVE CATTLE:	$3.27 Higher
DOW JONES:	641 Points Lower
NASDAQ:	414 Points Lower
CRUDE OIL:	$4.02 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 3.75 cents to close at $1.5825 with seven loads traded. The barrel cheese price declined 0.75, closing at $1.5650 with two loads traded. The dry whey price remained unchanged at 69.00 cents with no loads traded. Class III futures are mixed, ranging from 29 cents lower to 15 cents higher. Traders maintain optimism as the block cheese price has declined the past three days, but that has had little impact on Class III futures. The butter price declined by 2.00 cents to close at $1.8250 with 17 loads traded. Grade A nonfat dry milk declined 1.50 cents to close at $1.9225 with 17 loads traded. Class IV futures are 28 cents lower to 21 cents higher. Butter futures are 1.20-4.25 cents lower. Dry whey futures are 0.45 cent lower to 1.05 cents higher. Cheese futures are 2.90 cents lower to 0.40 cent higher.

Friday Morning Dairy Market Update - Overnight Trade Shows Continued Optimism

OPENING CALLS:

Class III Milk Futures:	5 to 10 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	3 to 5 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	4 to 5 Higher

MILK:

Traders continue to support Class III futures in the expectation that underlying spot cheese prices will maintain the current level or move higher. Strong demand is keeping pace with increased milk production. This is limiting the increase in inventory. Milk output remaining significantly above a year ago is not viewed as bearish, as it was late last year. The better prices the futures are currently showing throughout the rest of the year will keep milk production strong, and dairy farms will continue to hold onto and add cows.

CHEESE:

The block cheese price showed weakness over the past two days and it is uncertain whether that weakness will continue Friday. Buyers may hold back if the sellers remain actively wanting to move product to limit inventory building at the plant level.

BUTTER:

The market seems to be balanced as buyer interest in the spot market is being met with sellers wanting to move supplies. Sellers are not holding back to see how aggressive buyers will be. Strong butter output needs to be moved and the fact that inventory remains below a year ago is testimony to strong demand.