Wednesday Midday Dairy Market Summary - Block Cheese Shows Further Strength

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$1.70 Higher
LIVE CATTLE:	$0.60 Higher
DOW JONES:	437 Points Higher
NASDAQ:	389 Points Higher
CRUDE OIL:	$2.16 Lower

MIDDAY MARKET UPDATE:

The block cheese price increased 2.25 cents, closing at $1.6375 with 2 loads traded. The barrel cheese price remained unchanged at $1.5925 with no loads traded. There were 3 unfilled bids in blocks and 1 unfilled bid in barrels, with no remaining offers in either at the close of spot trading. The dry whey price slipped 0.25 cent to close at 68.75 cents with no loads traded. Class III futures are 3 cents lower to 27 cents higher. Butter showed further weakness, posting a decline of 2.25 cents to $1.7525 with 14 loads traded. Butter remains unable to find support as sellers continue to move supplies even at reduced prices. Grade A nonfat dry milk slipped 0.25 cent to close at $1.9375 with no loads traded. Class IV futures are 17 cents lower to 2 cents higher. Butter futures are 1.00-3.87 cents lower. Dry whey futures are 0.02 cent lower to 0.65 cent higher. Cheese futures are 0.30 cent lower to 2.40 cents higher. The March Federal Order class prices will be announced Wednesday afternoon.

Wednesday Morning Dairy Market Update - Overnight Trade Shows Renewed Optimism

OPENING CALLS:

Class III Milk Futures:	4 to 8 Higher
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	4 to 5 Lower
Soybean Futures:	5 to 7 Lower
Soybean Meal Futures:	$0.50 to $1 Higher
Wheat Futures:	11 to 14 Lower

MILK:

The nearby Class III contracts remain choppy while later contracts continue to make new highs. The optimism over higher prices as the year progresses may be fueled by increased dairy product production and the inability to rebuild inventory. USDA will release the February Dairy Products report on Thursday. Milk production is increasing as the spring flush unfolds. However, no difficulty is expected handling the increased milk supply. The potential for higher milk prices, as indicated by milk futures, will keep milk production strong and cow numbers increasing.

CHEESE:

Cheese prices are maintaining an overall uptrend, with the price increase on Tuesday keeping the trend intact. Cheese output has been increasing, but demand has so far been keeping pace. This resulted in the February total cheese inventory being below that of a year ago. There is no concern of a supply tightness. Buyers are purchasing for immediate demand and to build inventory.

BUTTER:

It is uncertain as to where the level of support for the butter price will be. The weakness on Tuesday was surprising, as butter demand is strong, with support expected to have been reached last week. It certainly is a buyer's market as they can purchase a substantial amount of butter at lower prices. This may limit the upside price potential later this year.

Tuesday Closing Dairy Market Update - Lab-grown Dairy Products Banned in Mississippi

GENERAL OVERVIEW:

Class III futures were mostly higher while Class IV futures posted double-digit losses in all traded contracts. Mississippi made the first move to ban the manufacture and sale of lab-grown dairy products. The February income over feed prices is $8.46.

MILK:

The state of Mississippi was the first to step out and prohibit the manufacture and sale of lab-grown dairy products. The proposed legislation would classify lab-grown dairy separately from conventional dairy products and make it illegal to manufacture, market or sell the products in the state. Previously, Mississippi banned lab-grown meat along with Florida and Alabama. This is a controversial subject and one that will be a topic of many discussions. The February soybean meal price was the final price needed to calculate income over feed for the Dairy Margin Coverage program. The average price was $312.38 per ton, up $13.13 from January. This puts the income over feed at $8.46. Class III futures were mostly higher, riding on the strength of cheese prices. Class IV futures posted double-digit losses in those contracts that were traded.

AVERAGE CLASS III PRICES:

3 Month:	$15.24
6 Month:	$15.82
9 Month:	$16.37
12 Month:	$16.67

CHEESE:

The bounce in cheese prices provided the confidence for traders to support milk futures. However, the upside price potential may be limited as the spring flush increases the milk supply for manufacturing.

BUTTER:

The decline of the butter price was surprising, as demand is good and buyers are readily purchasing what is being offered in the spot market. The difference is that sellers are aggressively moving butter even at lower prices. As long as sufficient butter is available to the market, buyers see little reason to be aggressive. Cream supplies are lower due to an increase in ice cream production, but that may not be sufficient to tighten supply.

OUTSIDE MARKETS SUMMARY:

May corn closed up 2.00 cents per bushel at $4.5775, May soybeans closed up 11.25 cents at $11.7100, and May soybean meal closed up $1.50 per ton at $316.40. May Chicago wheat closed up 9.25 cents at $6.1625. June live cattle closed up $3.08 at $243.28. May crude oil is down $1.27 per barrel at $101.61. The Dow Jones Industrial Average is up 1,125 points at 46,342, with the NASDAQ up 796 points at 21,591.