Thursday Midday Dairy Market Summary - Disappointing Day in Butter

OUTSIDE MARKETS SUMMARY:

CORN:	1 Lower
SOYBEANS:	Mixed
SOYBEAN MEAL:	$0.03 Lower
LIVE CATTLE:	$2.65 Lower
DOW JONES:	168 Points Lower
NASDAQ:	215 Points Higher
CRUDE OIL:	$2.25 Higher

MIDDAY MARKET UPDATE:

The block cheese price decreased 0.75 cent to close at $1.57 with no loads traded. The barrel cheese price remained unchanged at $1.5750 with no loads traded and no bids or offers on the table. The dry whey price decreased 3 cents closing at 68.00 cents with no loads traded but three offers and one bid left unfulfilled at the close. Class III futures are trading 10 to 38 cents lower. The butter price fell 5.25 cents, closing at $1.7375 with three loads traded. Grade A nonfat dry milk increased 1.75 cents to close at $2.1825 with three loads traded, breaking records nearly every day, with more likely to come as there were 10 bids remaining at the close trying to buy product and only one offer. Class IV futures are 3 to 28 cents lower. Butter futures are 2.575 cent lower to 5.375 cents lower. Dry whey futures are 1.175 cent lower to 2.675 cent lower. Cheese futures are 0.9 cents to 2.1 cents lower.

Fluid Milk and Cream - Western U.S. Report 17

Milk production in California is steady. Handlers indicate year over year production continues to be up. Central Valley manufacturers indicate plenty of milk is available and milk output is manageable. Spot loads are available. 

Farm level milk output in Arizona is steady. Some manufacturers continue to bring in spot milk loads to run busier production schedules. 

Milk production in New Mexico is steady. 

Milk production in the Pacific Northwest is steady and is providing plant managers with contracted volumes. However, some manufacturers have open processing capacities and are bringing in spot milk loads. 

Farm level milk output in the Mountain States of Idaho, Utah, and Colorado varies from steady to stronger. Spot milk loads are tighter with some manufacturers coming off some downtime. However, stakeholders indicate milk volumes are sufficiently meeting manufacturer's needs. Class I demand is steady, while Class II, III, IV demands vary from steady to stronger throughout the region. 

Stakeholders indicate cream load availability is sufficient for demands. No changes in cream multiples or demand are reported this week. Condensed skim milk loads are available and demand is steady.

Thursday Morning Dairy Market Update - Class III and Class IV Price Spread Continues to Widen

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

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

MILK:

Class III futures were slightly lower overnight on limited trading volume. Traders are cautious over the market's potential to move much higher in the near term. The increase in milk production is expected to continue over the next few months due to the spring flush and may remain higher the rest of the year. There should be sufficient milk available for increased demand, leaving little reason for buyers of dairy products to be concerned about supplies. The price spread between Class III and Class IV futures continues to widen as Grade A nonfat dry milk continues to set a new record price almost daily.

CHEESE:

Cheese prices may be carving out a sideways trading pattern. It is still too early to tell, but increasing milk receipts at the plant level and higher cheese output will be sufficient to meet any increase in demand. But even steady cheese prices at the current level will be better than anticipated at the beginning of the year.

BUTTER:

The butter price has been holding, which is providing some support to the market. The hope is strong domestic and international demand will absorb the extra production and keep inventories below a year ago. Ice cream production has increased, utilizing more of the available cream supply.