Friday Midday Dairy Market Summary - Dairy Futures Fall Back

OUTSIDE MARKETS SUMMARY:

CORN:	6 Lower
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$0.10 Lower
LIVE CATTLE:	$3.00 Higher
DOW JONES:	1057 Points Higher
NASDAQ:	427 Points Higher
CRUDE OIL:	$0.86 Higher

MIDDAY MARKET UPDATE:

It is another one of those head-scratching days as futures move in the opposite direction of what the cash market would suggest. The strength of block cheese and nonfat dry milk should provide support. The block cheese price increased 0.50 cent to close at $1.4725 with three loads traded. The barrel cheese price remained unchanged at $1.44 with no loads traded. The large number of unfilled bids that remained on Thursday were nowhere to be found today. The dry whey price remained unchanged at 73.00 cents with no loads traded. Class III futures are 1 to 37 cents lower. The butter price remained unchanged at $1.17 with no loads traded. Grade A nonfat dry milk jumped 4.00 cents to close at $1.64 with one load traded. This is the highest price since July 29, 2022. Class IV futures are 25-65 cents lower. Butter futures are 4.77 cents lower to 0.02 cent higher. Dry whey futures are 0.55 cent lower to 0.30 cent higher. Cheese futures are 1.10 to 4.00 cents lower.

Friday Morning Dairy Market Update - Strength Expected Ahead of Spot Trading

OPENING CALLS:

Class III Milk Futures:	3 to 8 Higher
Class IV Milk Futures:	10 to 30 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Milk futures certainly found support in recent weeks as underlying cash came to life. Class III futures moved to the highest level since early September, with Class IV futures at the highest level since early August. This has been an incredible counter-seasonal move and one that was completely unexpected. The current fundamentals do not suggest a change in trend of this magnitude. Milk production remains strong, with dairy product production outpacing that of a year ago. We hope demand will improve significantly, but there has been no solid evidence of that.

CHEESE:

Even though the cheese price has increased, it remains relatively low and is still a good buy for those who need it to fill orders and build inventory. There may be a level at which the market will plateau, but it is uncertain when buyers will be satisfied. Cheese is readily available for demand.

BUTTER:

The high volume of unfilled bids remaining in the spot market at the close of trading on Thursday suggests further price strength Friday. Buyers seem to be leapfrogging over each other to obtain supplies, creating a buying frenzy that is bringing more buyers in from the sidelines.

Thursday Closing Dairy Market Update - Butter and Cheese Production Increases

GENERAL OVERVIEW:

It was a very strong day for Class IV futures, with the March through June contracts over $1.00 higher. Class III futures diverged with closer contracts higher and later contracts lower. December butter and cheese production was higher than a year ago, according to the Dairy Products report.

MILK:

There have been many questions as to why milk futures and spot prices are seeing substantial strength. The quick answer to that question is, "I don't know". Strong milk production and the potential for it to remain that way for a while do not support the recent price increases. Cheese inventory at the end of the year was 2% higher than a year earlier. The increase in the butter price was justifiable due to a 7% lower inventory. The December Dairy Products report showed strong cheese and butter production compared to a year ago. Caution needs to be exercised as there could be a void developing under the market. Once the current buying runs its course, the fundamentals may not support the higher prices. Hopefully, there is more to this market than is currently seen, and higher prices will be maintained.

AVERAGE CLASS III PRICES:

3 Month:	$16.91
6 Month:	$17.41
9 Month:	$17.62
12 Month:	$17.60

CHEESE:

The December Dairy Products report showed American cheese production up 6.8% from December 2024, totaling 500 million pounds. Italian-type cheese output totaled 561 million pounds, up 7.4% above the previous year. Total cheese output reached 1.28 billion pounds, up 6.7% from December 2024. Dry whey production totaled 69.8 million pounds, up 1.2%. Lactose production increased 1.5%, totaling 94.8 million pounds. Whey protein concentrate increased 3.1% to 43.6 million pounds.

BUTTER:

Butter production totaled 204 million pounds, up 2.0% above December 2024, according to the Dairy Products report. Nonfat dry milk output totaled 127 million pounds, down 2.7%. Skim milk powder output totaled 43.6 million pounds, down 15.2%. Regular ice cream production totaled 48.9 million gallons, down 5.4% from December 2024.

OUTSIDE MARKETS SUMMARY:

March corn closed up 5.50 cents per bushel at $4.3500, March soybeans closed up 20.00 cents at $11.1225, and March soybean meal closed up $7.00 per ton at $303.20. March Chicago wheat closed up 8.50 cents at $5.3525. April live cattle closed down $6.20 at $235.60. March crude oil is down $1.85 per barrel at $63.29. The Dow Jones Industrial Average is down 593 points at 48,909, with the NASDAQ down 364 points at 22,541.