Friday Midday Dairy Market Summary - Butter Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$4.60 Higher
LIVE CATTLE:	$.45 Lower
DOW JONES:	71 Points Higher
NASDAQ:	167 Points Higher
CRUDE OIL:	$0.05 Higher

MIDDAY MARKET UPDATE:

The block cheese price declined 1.25 cents, closing at $1.4975 with five loads traded. The barrel cheese price increased 2.00 cents, closing at $1.49 with no loads traded. The increase in the barrel price has no impact on Class III futures as it has no bearing on the price calculation. The bid disappointment came from dry whey, with the price declining 6.00 cents to close at 68.00 cents, with no loads traded. Class III futures are 5 cents higher to 51 cents lower, with November showing the only gain. The butter price jumped 9.00 cents, closing at $1.87 with 17 loads traded. There were 17 unfilled bids and seven uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk jumped 6.25 cents to close at $1.6850 with six loads traded. Class IV futures are 5-61 cents higher. Butter futures are 0.75-7.50 cents higher. Dry whey futures are 1.00 cents lower to 0.50 cent higher. Cheese futures are 0.50-2.50 cents lower. USDA will release the January Milk Production report this afternoon. I estimate milk production to be 4.2% higher than a year ago and cow numbers to be 4,000 head more than December.

Friday Morning Dairy Market Update - USDA to Purchase $148 Million of Dairy Products For Food Banks

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	2 to 3 Lower
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	3 to 5 Higher

MILK:

The strength in milk futures on Thursday improved the outlook for milk prices immensely, but prices remain low historically. The strength has been attributed to the announcement USDA plans to purchase $148 milion worth of dairy products for food banks. It is difficult to say spot butter and block cheese prices were higher because of it, or if the higher prices were from continued buying interest because of low prices. Of the $148 million, $75 million is butter, $32.5 million is cheddar cheese, $10 milion is Swiss cheese, $20.5 million is fluid milk, and $10 million is for ultra-high temperature milk. To put it in perspective, if butter is purchased at $2.00 per pound, it would be 37.5 million pounds. Cheddar cheese at $2.00 per pound would be 16.3 million pounds. Fluid milk at $3.00 per gallon would be 6.8 million gallons. The prices at which these will be purchased are not known at this point, so amounts may be different. The January Milk Production report will be released Friday afternoon. I estimate milk production at 4.2% above a year ago. I estimate cow numbers to be 4,000 head above December.

CHEESE:

It is difficult to anticipate the movement of cheese prices, as the pattern would suggest the price could retrace. The block cheese price has increased for three consecutive days and may be ready for a correction, with sellers becoming aggressive.

BUTTER:

The spot price has been trending higher since mid-January as buyers have been purchasing to increase ownership. There is no concern over supply tightness, but buyers wanted to build inventory as a hedge against the potential for higher prices as the year progresses.

Thursday Closing Dairy Market Update - November Dairy Exports Increase 14%

GENERAL OVERVIEW:

Class III futures were up sharply after spot cheese trading took place. However, the strength quickly ran its course with contracts dropping back. Class IV futures held their ground with most contracts closing at or near the highs. Dairy exports in November were significantly higher.

MILK:

Class III milk futures moved significantly higher after the spot block cheese price increased. However, the exuberance ran its course with contracts falling back significantly from their highs. Class IV futures remained strong as both butter and nonfat dry milk increased. The March contract reached $19.00 but slipped back. It seems that much of the buying interest is due to buyers wanting to increase ownership at the lowest prices they can, which has resulted in higher prices as they outbid each other. I am not trying to be bearish on the market, but caution needs to be exercised as the fundamentals do not suggest there may be much upside potential for the market. Global dairy prices have been strengthening and increasing the desire to buy in case prices find further support. Dairy exports in November increased 14% from November 2024 in milk solids equivalents. The value of dairy exports totaled $801.7 million, with the year-to-date value reaching $8.82 billion. The USDA will release the January Milk Production report on Friday. I estimate milk production to be up 4.2% from the previous year. I estimate cow numbers to be up 4,000 head from December.

AVERAGE CLASS III PRICES:

3 Month:	$16.42
6 Month:	$17.17
9 Month:	$17.50
12 Month:	$17.52

CHEESE:

Cheese exports have been strong all year, with November exports totaling 50,775 metric tons, up 28% from the previous year. Year-to-date exports are 20% above the same period in 2024.

BUTTER:

Butterfat exports have been phenomenal all year, with November exports exceptional. Exports totaled 15,308 metric tons. This was an increase of 227.0% from November 2024. Year-to-date exports are 157% higher than in the same period in 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.25 cents per bushel at $4.2575, March soybeans closed up 7.50 cents at $11.4100, and March soybean meal closed up $.90 per ton at $304.80. May Chicago wheat closed up 14.25 cents at $5.6675. April live cattle closed up $0.90 at $243.43. April crude oil is up 1.35 per barrel at $66.40. The Dow Jones Industrial Average is down 268 points at 49,395, with the NASDAQ down 71 points at 22,683.