Thursday Midday Dairy Market Update - Butter Rebounds Slightly

OUTSIDE MARKETS SUMMARY:

CORN:	9 Higher
SOYBEANS:	9 Higher
SOYBEAN MEAL:	$0.03 Higher
LIVE CATTLE:	$0.75 Higher
DOW JONES:	952 Points Lower
NASDAQ:	223 Points Lower
CRUDE OIL:	$4.86 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.75 cents, closing at $1.61 with one load traded. The barrel cheese price remained steady, closing at $1.57 with no loads traded. The dry whey price increased 0.50 cent to close at 63.50 cents. Class III futures are steady to 22 cents lower. The butter price increased 2 cents to close at $2.04 with no loads traded. Grade A nonfat dry milk fell 0.25 cent to close at $1.6525 with 10 loads traded. Class IV futures are steady to 16 cents lower. Butter futures are 1-3.55 cents higher. Dry whey futures are steady to 0.50 cent higher. Cheese futures are 0.6-2.50 cents lower.

Thursday Morning Dairy Market Update - Traders Will Be Cautious Ahead of Spot Trading

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	4 to 6 Higher
Soybean Meal Futures:	$0.50 to $1 Lower
Wheat Futures:	6 to 8 Higher

MILK:

Milk futures did not keep pace with spot prices Wednesday. Class III futures should have seen more strength due to the increase in cheese prices. Class IV futures should have declined further due to the weaknes of Class IV futures. Traders seem to believe the movement of the underlying cash will remain choppy and the gains or losses on one day may be reversed the following day. Strong milk output would suggest limited upside price potential, but increasing demand may keep pace with the increase. The January Dairy Products report will be released Thursday afternoon. This report should show continued strong butter and cheese production. Due to this report, no Dairy Revenue Protection prices will be released Thursday.

CHEESE:

If the block cheese price increases Thursday, it will move to the highest level since Nov. 11, 2025. However, the last time the price reached this level, it fell back as buyers did not want to bid higher. The same could happen Thursday, as that could be a price threshold.

BUTTER:

The volume of unfilled bids at the close of spot trading Wednesday suggests the price weaknes may be limited. The substantial volume of loads traded may be a detriment to the price later, as buyers will have quite a bit of butter on hand unless demand continues to increase. 

Wednesday Closing Dairy Market Update - Global Dairy Trade Auction Gains 5.7%

GENERAL OVERVIEW:

Class III futures closed moderately higher, while Class IV futures were unchanged to mostly lower. Milk futures did not keep pace with the strength or weakness of the spot prices. The February Federal Order class prices were released, with all classes higher than the previous month.

MILK:

The movement of the underlying spot prices did not translate into the milk futures. The strength of the cheese prices resulted in moderate gains in Class III futures. The weakness of butter showed moderate losses in some contracts. Traders are taking the volatility in stride, realizing that the gains or losses on one day may be the opposite the following day. The February Federal Order class prices were released. The Class II price is $15.34, up $1.42 from January, but down $5.74 from February 2025. The Class III price is $14.94, up $0.35 from the previous month, but down $5.24 from the previous year. The Class IV price is $16.29, up $2.74 from January but down $3.61 from January 2025. The Global Dairy Trade auction trade-weighted average increased 5.7% from the previous month. Anhydrous milk fat increased 5.7% to $7,147 per metric ton or $3.24 p4er pound. Butter increased 6.1% to $6,728 per metric ton or $3.05 per pound. Buttermilk powder decreased 0.2% to $3,145 per metric ton or $1.43 per pound. Cheddar cheese increased 4.3% to $4,920 per metric ton or $2.23 per metric ton. Lactose decreased 3.9% to $1,459 per metric ton or $0.66 per pound. Skim milk powder jumped 9.1% to $3,242 per metric ton or $1.47 per pound. Whole milk powder increased 4.5% to $3,863 per metric ton or $1.75 per pound. Mozzarella cheese increased 7.9% to $4,189 per metric ton or $1.90 per pound.

AVERAGE CLASS III PRICES:

3 Month:	$17.41
6 Month:	$17.90
9 Month:	$18.08
12 Month:	$17.90

CHEESE:

The strength in cheese certainly provides some bullishness to the market. Cheese futures were higher, but not as much as would have been anticipated. Futures hold a significant premium to cash and do not need to increase much.

BUTTER:

The large decline in the butter price may be short-lived if all of the unfilled bids below the market remaining at the end of spot trading will need to be filled in the near term. At least it may limit the downside potential.

OUTSIDE MARKETS SUMMARY:

May corn closed down 2.75 cents per bushel at $4.4375, May soybeans closed down 1.00 cent at $11.6950, and May soybean meal closed down $4.80 per ton at $309.90. May Chicago wheat closed down 5.75 cents at $5.6825. April live cattle closed up $4.23 at $238.35. April crude oil is up $0.10 per barrel at $74.66. The Dow Jones Industrial Average is up 238 points at 48,739, with the NASDAQ up 291 points at 22,807.