Wednesday Closing Dairy Market Update - American Cheese Output Declines from a Year Ago

GENERAL OVERVIEW:

At least there was some life in milk futures today. Class III futures increased, correcting from the large declines over the past week. Class IV jumped due to the strength of butter and nonfat dry milk in the spot market. Walmart opens its third milk processing facility.

MILK:

Milk futures posted strong gains as a result of higher underlying cash prices. Traders reacted quickly to liquidate short positions to hopefully retain a profit that may have been realized from the decline in futures. Class IV contracts showed the greatest gains, with June up as much as $0.91 at one point. If the price holds, it will set a new contract high. The strong gains are a welcome sight, but the strength may be limited as the spring flush continues. However, if demand improves, milk prices may regain much of what was lost. More strength will be needed in Class III futures as they fell substantially over the past two weeks. The price range for spot milk has widened this past week as more milk is becoming available. Spot milk prices in the Central region range from $7.00 below Class to flat class.

AVERAGE CLASS III PRICES:

3 Month:	$17.70
6 Month:	$18.30
9 Month:	$18.29
12 Month:	$18.12

CHEESE:

The March Dairy Products report showed an unexpected decrease in production from March 2025. American cheese output totaled 488 million pounds, which was 2.3 percent below March 2025. Italian-type cheese output totaled 542 million pounds, up 2.3 per cent from a year earlier. Total cheese output reached 1.26 billion pounds, up 1.2 percent from a year earlier. The production of dry whey increased 3.6 percent, totaling 78.7 million pounds. Lactose production totaled 92.1 million pounds, down 6.5 percent, with whey protein concentrate down 6.1 percent at 41.4 million pounds.

BUTTER:

March butter production totaled 232 million pounds, up 1.2 percent from March 2025. Nonfat dry milk output reached 175 million pounds, up 9.9 percent, with skim milk powder up 10.1 percent at 37.4 million pounds. Regular ice cream production output totaled 62.8 million gallons, up 5.1 percent from March 2025.

OUTSIDE MARKETS SUMMARY:

July corn closed down 11.50 cents per bushel at $4.6850, July soybeans closed down 16.75 cents at $11.9475, and July soybean meal closed down $3.10 per ton at $317.30. July Chicago wheat closed down 10.50 cents at $6.1725. June live cattle closed up $0.25 at $253.48. June crude oil is down $6.77 per barrel at $95.50. The Dow Jones Industrial Average is up 612 points at 49,911, with the NASDAQ up 513 points at 25,839.

Wednesday Midday Dairy Market Update - Milk Futures Post Strong Gains

OUTSIDE MARKETS SUMMARY:

CORN:	11 Lower
SOYBEANS:	21 Lower
SOYBEAN MEAL:	$1.30 Lower
LIVE CATTLE:	$0.15 Higher
DOW JONES:	512 Points Higher
NASDAQ:	408 Points Higher
CRUDE OIL:	$7.05 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 3.00 cents to close at $1.6600. There were eleven loads traded. The barrel cheese price remained unchanged at $1.6150 with no loads traded. The dry whey price increased 0.50 cent to close at 70.00 cents with one load traded. The gain in blocks supported Class III futures with contracts 6-31 cents higher. The butter price increased by 3.00 cents to close at $1.64 with four loads traded. Grade A nonfat dry milk increased a penny to $2.2925 with two loads traded and setting another new record high. Class IV futures are 12-56 cents higher. Butter futures are 0.87 cent lower to 5.17 cents higher. Dry whey futures are 0.32-1.42 cents higher. Cheese futures are 0.50-2. 80 cents higher. The March Dairy Products report will be released today and is expected to show higher output than a year ago.

Wednesday Morning Dairy Market Update - Milk Futures Show Support

OPENING CALLS:

Class III Milk Futures:	5 to 15 Higher
Class IV Milk Futures:	5 to 15 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	9 to 11 Lower
Soybean Futures:	9 to 13 Lower
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	17 to 20 Lower

MILK:

Milk futures may continue their strength today as traders may turn more optimistic over price potential. Of course, strength over one or two days does not indicate a change in trend. Underlying cash prices may have limited upside potential, but higher prices may unfold for a time. Some strength might be from traders reacting to the substantial decline in crude oil overnight as President Trump is pausing Project Freedom, allowing Iran to come to an agreement with the U.S. This may not have much of a fundamental impact in the near term, but traders may buy into the market with the hope of taking a quick profit.

CHEESE:

Cheese prices have not provided any indication of support, but sideways price action is expected for now. Increased milk receipts keep vats full and plants running on full schedules. This leaves sufficient cheese available to the market.

BUTTER:

Butter futures traded overnight in the July and August contracts, with prices slightly higher. The strength of the butter price on Tuesday is being viewed with caution. The pattern has been that an increase in the price has been followed by further weakness. Traders will remain cautious unless proven otherwise. The March Dairy Products report will be released Wednesday afternoon and is expected to show increased production from a year ago.