Fluid Milk and Cream - Western U.S. Report 7

California milk production and components are strong this week. Open processing time is tight, especially in the Central Valley. Stakeholders indicate spot loads are available. 

Arizona and New Mexico farm level milk output varies from steady to stronger. 

Pacific Northwest milk production is stronger. Manufacturers indicate there is some open processing time for spot milk and spot cream loads to fill. 

In the mountain states of Idaho, Utah, and Colorado, farm level milk output varies from steady to stronger. Idaho handlers note milder weather has positively impacted cow comfort, which improved milk output this week. Spot milk loads are available. Dairy farmers throughout the region are meeting contractual milk volumes. Class III demands vary from steady to stronger, while all other Class demands are steady. 

Stakeholders convey cream load availability is somewhat tighter and demand is mixed. No changes in cream multiples are reported this week. Condensed skim milk availability and demand are steady.

Thursday Midday Dairy Market Summary - Butter Price Exceeds the Previous High

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	10 Higher
SOYBEAN MEAL:	$4.90 Higher
LIVE CATTLE:	$0.10 Lower
DOW JONES:	673 Points Lower
NASDAQ:	426 Points Lower
CRUDE OIL:	$1.93 Lower

MIDDAY MARKET UPDATE:

The block cheese price slipped 0.50 cent, closing at $1.3875 with one load traded. There were two uncovered offers remaining at the close of spot trading with no unfilled bids. The barrel cheese price remained unchanged at $1.44 with no loads traded. The dry whey price remained unchanged at 72.00 cents with no loads traded. Class III futures are 6 cents lower to 22 cents higher. The March contract shows the only loss. The butter price jumped 8.25 cents, closing at $1.7350 with 23 loads traded. There were 54 unfilled bids and no uncovered offers remaining at the close of spot trading, suggesting the price will continue to increase as buyers attempt to outbid each other to purchase at the lowest price they can. Grade A nonfat dry milk increased 0.25 cent to close at $1.5975 with three loads traded. Class IV futures are 3-66 cents higher. Butter futures are 0.25-5.85 cents higher. Dry whey futures are 0.02-0.50 cent lower. Cheese futures are 0.20 cent lower to 2.50 cents higher.

Thursday Morning Dairy Market Update - Limited Interest Ahead of Spot Traidng

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	6 to 12 Higher
Soybean Meal Futures:	$3 to $5 Higher
Wheat Futures:	1 to 2 Higher

MILK:

Traders may be uncertain over the strength or weakness of spot prices, leaving them guessing as to price direction ahead of spot trading. Market fundamentals are not creating a long-term trend other than sideways. Milk production is reported to be steady this week compared to last week. It may remain that way and begin to show some increase as the weather outlook is conducive to steady to higher milk output. The spread between Class III and Class IV futures has widened due to the strength of butter and nonfat dry milk, moving it back to the level seen last fall. The calculation for price based on the spot prices on Wednesday showed a Class III price of $15.17 and a Class IV price of $18.55. Bear in mind that this is just based on Wednesday's prices. The average over the month is from the weekly AMS prices, which are based on the daily spot prices that manufacturers use for pricing. Class IV milk is in a strong position.

CHEESE:

The weakness of cheese on Wednesday may increase the desire of buyers to step into the market more aggressively Thursday. However, there is a sufficient supply of cheese to satisfy demand, with buyers having little concern over supply tightness.

BUTTER:

The volume of unfiled bids in the spot market on Wednesday suggests the potential for further gains Thursday. Retail butter demand has improved, and export demand remains strong. This should keep buyers active even though supplies are readily available.