Wednesday Midday Dairy Market Summary - Spot Prices Push Higher

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	6 Higher
SOYBEAN MEAL:	$7.20 Higher
LIVE CATTLE:	$0.80 Higher
DOW JONES:	284 Points Higher
NASDAQ:	265 Points Higher
CRUDE OIL:	$0.10 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 4.25 cents, closing at $1.6015 with two loads traded. This is the highest price since Nov. 11, 2025. The barrel cheese price jumped 7.00 cents, closing at $1.56 with no loads traded and one unfilled bid posted with no interested sellers. The dry whey price remained unchanged at 63.75 with no loads traded. Class III futures are steady to 65 cents higher, with the April contract showing the greatest gain. The butter price increased 2.25 cents, closing at $1.8350 with no loads traded. There were two unfilled bids and two uncovered offers remaining at the close. Grade A nonfat dry milk increased 2.25 cents to close at $1.6725 with two loads traded. Class IV futures are 25-50 cents higher. Butter futures are 2.63-7.50 cents higher with the April, May and July contracts limit up. Dry whey futures are 1.30 cents lower to 0.50 cent higher. Cheese futures are 0.10-5.30 cents higher.

Wednesday Morning Dairy Market Update - Spot Butter Price May Find Support

OPENING CALLS:

Class III Milk Futures:	8 to 15 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	1 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	3 to 4 Higher
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	3 to 4 Lower

MILK:

Class III milk futures were higher in overnight trade with double-digit gains in the March through May contracts. The February contract is up a penny and will show limited movement, with the contract mostly priced. The June and later contracts have not traded overnight. The Milk Production report was bearish to the market due to continued strong milk production and higher cow numbers. The Cold Storage report was neutral to cheese and bullish for butter. A reminder that the final day of the signup period for the Dairy Margin Coverage Program is Thursday. Historically, the USDA has extended the signup period, allowing for more time. However, if you intend to take part in the program, make sure you sign up by the deadline, as it may not be extended.

CHEESE:

The block cheese price has increased 27.75 cents since the low set on Jan. 12. This has been an unusual counter-seasonal move. However, it may not be counter-seaaonal, but rather a market correction of the bearishness that prevailed during the fourth quarter of 2025. It just seems counter-seasonal due to the price trend. Buyers have been taking advantage of the lower prices to hedge against higher prices late in the year. Fresh cheese demand has been good, keeping buyers aggressive in the spot market.

BUTTER:

Spot butter may find further support due to the Cold Storage report showing inventory down 17% from a year ago. Inventory increased in January but at a slower pace than last year. Demand has been good and absorbed increased production.

Tuesday Closing Dairy Market Update - January Butter Stocks Were 17% Below a Year Ago

GENERAL OVERVIEW:

Milk futures were mostly higher, with gains limited despite the strength in the block cheese price. The January Cold Storage report was neutral for cheese and bullish for butter.

MILK:

Class III futures were mostly higher, but the gains were moderate despite the strength of the spot block cheese price. There is some concern over continued strength in the market. However, buyers remain aggressive, and increasing prices may bring more buyers into the spot market. Phenomenal growth in milk production is taking place in Kansas and South Dakota. The January Milk Production report showed that production in Kansas increased 94 million pounds, up 26.2% from January 2025. Cow numbers increased by 45,000 head, with milk production per cow up 20 pounds from a year ago. South Dakota milk production increased by 46 million pounds, totaling 470 million pounds, up 10.8% from a year ago. The number of milk cows increased by 25,000 head, totaling 240,000 head. Milk production per cow was down 10 pounds. The increase in cow numbers offset the decline in production per cow.

AVERAGE CLASS III PRICES:

3 Month:	$16.26
6 Month:	$17.11
9 Month:	$17.45
12 Month:	$17.48

CHEESE:

American cheese inventory decreased 1.5 million pounds from December, totaling 792.3 million pounds. This was very close to the same level it was in January 2025. Swiss cheese inventory increased 464,000 pounds, totaling 23.1 million pounds. This was up 2.0% from December and up 1.0% from January 2025. Other cheese inventory totaled 564.8 million pounds, up 3.4 million pounds from December. This was 1.0% higher than in December, but very near the same level as a year ago. Total cheese production reached 1.380 billion pounds, up 2.4 million pounds from December. Inventory was near the same level as it was in January 2025.

BUTTER:

Butter inventory in January totaled 215.4 million pounds. This was an increase of 28.8 million pounds or 15% from December. However, inventory was down 17% from January 2025. This is a bullish report for butter. Even though cream supplies have been abundant and butter output strong, stocks are substantially lower than a year ago.

OUTSIDE MARKETS SUMMARY:

March corn closed up .25 cent per bushel at $4.2775, May soybeans closed up 5.50 cents at $11.5525, and May soybean meal closed up $1.90 per ton at $314.40. May Chicago wheat closed down .50 cent at $5.7325. April live cattle closed down $0.15 at $239.10. April crude oil is down $0.68 per barrel at $65.63. The Dow Jones Industrial Average is up 370 points at 49,175, with the NASDAQ up 236 points at 22,864.