Friday Midday Dairy Market Summary - Butter Weakens

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	4 Lower
SOYBEAN MEAL:	$0.90 Higher
LIVE CATTLE:	$1.00 Higher
DOW JONES:	275 Points Higher
NASDAQ:	113 Points Higher
CRUDE OIL:	$0.26 Higher

MIDDAY MARKET UPDATE:

Both block and barrel cheese remained unchanged at $1.3875 and $1.44, respectively. There were no loads traded in either category. The dry whey price remained unchanged at 72.00 cents, with no loads traded. This should have resulted in Class III futures remaining somewhat steady, but contracts are 51 cents lower to 3 cents higher, with the March contract showing the greatest loss. The butter price declined 3.00 cents to close at $1.7050 with 29 loads traded. There were 23 unfilled bids remaining at the close of spot trading, but the buyers were not aggressive. Grade A nonfat dry milk gained 0.25 cent to close at $1.60 with seven loads traded. Class IV futures are 12 cents lower to 20 cents higher. Butter futures are 1.45 cents lower to 1.52 cents higher. Dry whey futures are 0.25 cent lower to 0.50 cent higher. Cheese futures are 0.30-4.50 cents lower.

Friday Morning Dairy Market Update - Overnight Trade Showed Little Interest

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	10 to 20 Higher
Butter Futures:	2 to 3 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Lower
Soybean Futures:	4 to 5 Lower
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	2 to 3 Lower

MILK:

Milk futures have declined from the highs, but should find support above the previous lows that were established before the strong price increase. The hope is demand will slowly raise the floor with each price increase, establishing a higher level. However, the upside price potential may be limited due to continued strong milk production. If the outlook for milk prices improves, milk output will not slow. The discussion of whether there are sufficient replacement heifers available to the market continues. What we do know is that cow numbers continue to increase. Expansions continue to take place, and heifers seem to be available if one wants to pay the high price. The markets will be closed on Monday in observance of Presidents Day.

CHEESE:

One would like to think the block cheese price was near its low, and buyer interest would increase. However, buyers seem to have little reason to be aggressive as cheese supplies are sufficient for demand, and there is little expectation of lower supplies. Many plants are running on full schedules, with cheese output higher than a year ago.

BUTTER:

The butter price is expected to show further strength due to the large volume of unfilled bids remaining at the close of spot trading on Thursday. Butter is available, but sellers may hold for higher prices due to the strong buying interest. Churns are operating seven days a week to process the cream supplies, but inventory is not building.

Thursday Closing Dairy Market Update - Stage Set for Higher Prices on Friday

GENERAL OVERVIEW:

Class III futures were higher despite a slight decline in the block cheese price and the steady dry whey price. Class IV futures found solid support from the jump in the butter price and a slight increase in nonfat dry milk. Class IV futures might find further strength as it follows butter.

MILK:

The volatility will continue as traders will react quickly to underlying cash movement as they want to scalp the market for a profit, and increased volatility will increase the odds for that to happen. The volatility will allow greater opportunities for hedgers to establish price protection. Mik production and components have been steady to stronger over the past week as the weather has improved cow comfort. The Central region reports that Class III demand has been steady to lighter recently, with a little more milk being available on the spot market. Spot milk is $1.00 to $4.00 under class, indicating the supply is plentiful. Overall fundamentals remain much the same as they had been for a few months and are not expected to change anytime soon.

AVERAGE CLASS III PRICES:

3 Month:	$16.08
6 Month:	$16.77
9 Month:	$17.17
12 Month:	$17.25

CHEESE:

Block cheese has not been able to find support and has declined back to the lowest level since Feb. 2. Many times, the movement and direction of butter impact the direction of cheese. Hopefully, this will take place soon to at least provide another price bump and hopefully keep it from trending lower.

BUTTER:

The jump in the butter turned Class IV futures higher, allowing the contracts to regain some of the recent losses. There is strong potential for spot butter to increase on Friday due to a large number of unfilled bids that remained at the close of spot trading. The price is still relatively low, and buyers are interested in increasing ownership to avoid the possibility of higher prices as the year progresses.

OUTSIDE MARKETS SUMMARY:

March corn closed up 3.75 cents per bushel at $4.3125, March soybeans closed up 13.25 cents at $11.3725, and March soybean meal closed up $4.90 per ton at $307.90. March Chicago wheat closed up 15.25 cents at $5.5250. April live cattle closed down $0.33 at $240.65. March crude oil is down $1.74 per barrel at $62.89. The Dow Jones Industrial Average is down 669 points at 49,452, with the NASDAQ down 469 points at 22,597.