Tuesday Midday Dairy Market Summary - Traders Focus on Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	5 Lower
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$4.60 Lower
LIVE CATTLE:	$0.60 Higher
DOW JONES:	126 Points Lower
NASDAQ:	91 Points Lower
CRUDE OIL:	$2.03 Higher

MIDDAY MARKET UPDATE:

The block cheese price remained unchanged at $1.6735 with four loads traded. The barrel cheese price slipped 0.25 cent to close at $1.5900 with one load traded. The dry whey price remained unchanged at 69.00 cents with no loads traded. Traders focused on the slight weakness in barrels. This triggered selling in Class III futures with contracts 3 to 52 cents lower. The butter price slipped 0.50 cent to close at $1.7475 with 20 loads traded. This is the lowest butter price since Feb. 18. Grade A nonfat dry milk increased 2.25 cents to close at $1.9850 with no loads traded. Traders focused on the slight weaknes of butter rather than the strength of nonfat dry milk. Class IV futures are 5 to 26 cents lower. Butter futures are steady to 2.20 cents lower. Dry whey futures are steady to 0.75 cent lower. Cheese futures are 0.60 to 4.50 cents lower.

Tuesday Morning Dairy Market Update - Traders Are Cautious After Monday's Weakness

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 6 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

The pressure on milk futures Monday moved traders to place bids and offers overnight, with limited desire to move those prices. Traders see uncertainty in the market Tuesday as they contemplate whether stability in spot cheese indicates price support or price resistance. The weakness in butter on Monday leaves the potential for further weakness Tuesday and lower Class IV prices. The Global Dairy Trade auction results will be seen Tuesday, indicating the state of international demand.

CHEESE:

Many times, stability in the spot cheese prices indicates price support. However, traders viewed it as a possible point of price resistance for the time being. Cheese production is increasing as milk output increases. More cheese will be available to the market, which needs to be absorbed by demand, or price weakness will unfold.

BUTTER:

The price bounced from this level last time, but it is uncertain whether this will again be a level of support or if buyers will continue to hold back and purchase at lower prices due to the interest of sellers to move supplies. The low price should be attractive for buyers to increase ownership

Monday Closing Dairy Market Update - Milk Futures End on a Sour Note

GENERAL OVERVIEW:

Both Class III and Class IV futures suffered significant losses. It was understandable that Class IV futures would be lower, but it was surprising to see Class III futures show a similar weakness. Steady spot cheese prices and a slightly higher dry whey price should have left futures nearly steady.

MILK:

Milk production continues to increase seasonally, with the spring flush generally just beginning. Growth is expected with production running ahead of a year ago. There is little reason to believe that milk production will slow anytime soon. The outlook for better milk prices and continued high calf prices will keep cow numbers higher and likely increasing. Even with the significant decline of Class III futures today, prices are back to where they were at the close of March. The June through December contracts are solidly above $18.00. Class IV futures have not been as fortunate, with contracts declining since March 24. The only contracts remaining above $20.00 are April and May.

AVERAGE CLASS III PRICES:

3 Month:	$17.83
6 Month:	$18.30
9 Month:	$18.41
12 Month:	$18.24

CHEESE:

Spot cheese prices remained unchanged, with no interest from sellers to move product. This was bullish from the view that sellers were not anxious to move supplies, but bearish from the view that buyers were not aggressively looking to purchase supplies for demand or to build inventory. Traders were uncertain whether there would be a much further upside potential.

BUTTER:

Increasing retail demand and strong international demand have not been sufficient to provide support for the market. Buyers continue to purchase what they need without chasing the market higher. The available cream for butter production has declined slightly due to the increase in production from other Class II products. However, butter output remains high with manufacturers moving it to the spot market without hesitation.

OUTSIDE MARKETS SUMMARY:

May corn closed up 1.75 cents per bushel at $4.5400, May soybeans closed up 3.25 cents at $11.6675, and May soybean meal closed up $1.40 per ton at $316.60. May Chicago wheat closed down 3.00 cents at $5.9525. June live cattle closed up $0.70 at $247.03. May crude oil is up $1.19 per barrel at $112.73. The Dow Jones Industrial Average is up 165 points at 46,670, with the NASDAQ up 117 points at 21,996.