Friday Closing Dairy Market Update - Class IV Futures Close at New Contract Highs

GENERAL OVERVIEW:

It was a strong end to the week. Class III futures closed lower for the week while Class IV futures closed higher. The nonfat dry milk price was the leader of the week.

MILK:

Class III futures struggled in the first half of the week with significant losses. The strength of cheese prices on Thursday and today provided the means for a rebound. Although the close looked positive, the upside potential may be limited with prices remaining choppy at best in the near term. Class IV futures had a very positive week with contracts closing significantly higher, with some contracts closing at new contract highs. A winter storm will impact numerous states this weekend with the potential for substantial snow in the upper Midwest. However, that is expected to have a limited impact on milk production. Farm milk pickup may face delays. The delivery of dairy products to retail outlets may be impacted. No impact is expected on milk prices.

AVERAGE CLASS III PRICES:

3 Month:	$16.71
6 Month:	$17.39
9 Month:	$17.72
12 Month:	$17.66

CHEESE:

For the week, blocks declined 8.75 cents with 26 loads traded. The weekly average price was $1.5465. Barrels declined 4.00 cents with one load traded. The weekly average price was $1.5390. Dry whey increased 2.00 cents with one load traded. The weekly average price was 64.60 cents. Buyers reached a threshold on Monday and retreated as they stepped back.

BUTTER:

For the week, butter fell 16.25 cents with 75 loads traded. The weekly average price was $1.8930. Grade A nonfat dry milk gained 8.50 cents with five loads traded. The weekly average price was $1.7280. Trading activity in butter remains strong, with sellers wanting to move supplies rather than build inventory. Increased retail demand is being met easily.

OUTSIDE MARKETS SUMMARY:

May corn closed up 4.75 cents per bushel at $4.6725, May soybeans closed down 2.00 cents at $12.2525, and May soybean meal closed up $2.50 per ton at $322.70. May Chicago wheat closed up 15.25 cents at $6.1375. April live cattle closed down $0.35 at $230.90. April crude oil is up $2.98 per barrel at $98.71. The Dow Jones Industrial Average is down 119 points at 46,558, with the NASDAQ down 2 points at 22,105.

Friday Midday Dairy Market Summary - Spot Nonfat Dry Milk Price Jumps

OUTSIDE MARKETS SUMMARY:

CORN:	3 Higher
SOYBEANS:	9 Lower
SOYBEAN MEAL:	$1.30 Higher
LIVE CATTLE:	$0.20 Lower
DOW JONES:	16 Points Lower
NASDAQ:	164 Points Lower
CRUDE OIL:	$1.49 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 1.75 cents, closing at $1.5300 with three loads traded. The barrel price increased 1.75 cents, closing at $1.5300 with no loads traded. The dry whey price increased 1.00 cents, closing at 66.00 cents with no loads traded. Class III futures jumped with contracts unchanged to 37 cents higher. The butter price slipped 0.50 cent, closing at $1.8475 with seven loads traded. Grade A nonfat dry milk remained unchanged at $1.7650 with no loads traded. Class IV futures are steady to 43 cents higher, with the May contract moving to $20.15 and a new contract high. Butter futures are mixed, ranging from 5.00 cents lower to 0.65 cent higher. Dry whey futures are 0.25-0.50 cent higher. Cheese futures are 0.30 cent lower to 4.20 cents higher.

Friday Morning Dairy Market Update - Unusual Activity in Overnight Milk Futures

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 3 Lower
Soybean Futures:	8 to 10 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	Mixed

MILK:

The only trading activity taking place overnight in milk futures was in the April Class IV contract. There were 15 contracts traded, adding to the unusualness of this event. I have never seen overnight trading activity in Class IV, but not in Class III futures. Class IV futures have been outperforming Class III futures, but not because of a strong butter price, but because of the strength of nonfat dry milk. The nonfat dry milk price has moved to the highest level since June 28, 2022. Butter and cheese prices may have difficulty trending higher as milk production increases seasonally.

CHEESE:

The block cheese price maintains an overall uptrend, but may develop a sideways pattern as more milk moves to manufacturing due to increased milk production. Demand for cheese has improved, but inventory is expected to increase over the next few months.

BUTTER:

The butter price may be low enough to generate buying interest, but the buyers may not be aggressive. Sellers have been interested in moving supplies. This may keep buyers less aggressive and only willing to buy as it is offered to them. There is no concern over tightening supplies despite an increase in retail demand.