Tuesday Midday Dairy Market Summary - Bounce in Butter Shows Little Impact

OUTSIDE MARKETS SUMMARY:

CORN:	Unchanged
SOYBEANS:	11 Higher
SOYBEAN MEAL:	$2.40 Higher
LIVE CATTLE:	$0.17 Higher
DOW JONES:	59 Points Higher
NASDAQ:	53 Points Lower
CRUDE OIL:	$0.34 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.25 cent to close at $1.4425 with no loads traded. The barrel chees pricre remained unchanged at $1.4400 with no loads traded. The dry whey price declined a penny, closing at 72.00 cents with one load traded. Class III futures are mixed, ranging from 28 cents lower to 11 cents higher. The butter price increased 1.00 cents to close at $1.6350 with 19 loads traded. Grade A nonfat dry milk slipped 0.50 cent to close at $1.60 with no loads traded. Class IV futures are 26-81 cents lower despite the increase in butter. Pressure may be from the spot butter price slipping back from the higher price during spot trading. Butter futures are 3.27 cents lower to 1.30 cents higher. Dry whey futures are 0.30 cent lower to 1.35 cents higher. Cheese futures are 0.50 to 2.70 cents lower. USDA estimates milk production this year to total 234.5 billion pounds. This is 200 million pounds higher than the estimate a month earlier. If realized, it would be 3.0 billion pounds above 2025.

Tuesday Morning Dairy Market Update - Uncertain Trade Ahead of Cash

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The pressure seen in milk futures Monday will keep traders cautious Tuesday. Heavy liquidation did not continue in overnight trade as most trading has been short-term, with traders not carrying overly long or short positions. This keeps multiple days of liquidation from taking place. Milk futures are expected to be lower ahead of spot trading as there is uncertainty about whether buyers in the spot market will hold back to see if sellers will remain aggressive. The World Agricultural Supply and Demand report will be released Tuesday, which may impact the grain markets. The report will contain USDA's average estimates for milk production, milk prices, and dairy product prices for this year. The expectation is milk production and prices will be higher compared to the previous report.

CHEESE:

It was encouraging to see the block cheese price rebound from the low during spot trading. This indicated there were willing buyers at the low and, hopefully, we are establishing a bottom. However, the weakness might leave buyers less aggressive as they wait to see if sellers will remain active Tuesday.

BUTTER:

The amount of unfilled bids remaining at the close of spot trading Monday suggests limited downside potential, as buyers are willing to purchase at the low price. However, it is uncertain whether those buyers will remain at those levels or lower bids due to the weakness on Monday. The price may have limited downside, but will remain volatile.

Monday Closing Dairy Market Update - Milk Futures Fall

GENERAL OVERVIEW:

Milk futures were hit hard today, with the Class IV contracts showing the greatest losses. The weakness in the butter, cheese and nonfat dry milk prices might indicate the market found a level of price resistance. The World Agricultural Supply and Demand Estimates report will be released on Tuesday.

MILK:

The weakness in the spot markets took a lot of steam out of futures today. The recent trend higher was not expected to continue without a retracement. The hope is that the price weakness will be limited. However, the current fundamentals do not suggest that milk prices will continue to trend higher anytime soon, even though world dairy prices have increased. USDA will release the World Agricultural Supply and Demand Estimates report on Tuesday, which will set some direction for grain prices. The report will contain the estimates for milk production, milk prices and dairy product prices for this year. This report is not a market-mover, but it will provide some indication of what is anticipated for average prices by the USDA. Generally, the report changes relative to what the cash and futures prices have been doing since the last report. Based on that, estimated prices will be higher than the previous month.

AVERAGE CLASS III PRICES:

3 Month:	$16.26
6 Month:	$15.86
9 Month:	$17.20
12 Month:	$17.25

CHEESE:

Cheese futures fell lower than the decline in the spot price suggested. Traders seem to think there will be further downside price potential. There is sufficient cheese available for demand, with strong manufacturing schedules expected to keep the supply of cheese readily available to the market.

BUTTER:

The drop in the butter price was expected, but not of the magnitude it fell today. There were 27 unfilled bids at the close of spot trading, possibly indicating limited weakness, as buyers might purchase aggressively at a lower price. Buyers may remain active to purchase supplies to avoid paying higher prices later if they were to develop.

OUTSIDE MARKETS SUMMARY:

March corn closed down 1.50 cents per bushel at $4.2875, March soybeans closed down 4.50 cents at $11.1075, and March soybean meal closed down $5.80 per ton at $297.80. March Chicago wheat closed down 1.00 cent at $5.2875. April live cattle closed up $0.95 at $238.20. March crude oil is up $0.88 per barrel at $64.43. The Dow Jones Industrial Average is up 20 points at 50,136, with the NASDAQ up 207 points at 23,239.