Monday Closing Dairy Market Update - Milk Futures Close With Strong Gains

GENERAL OVERVIEW:

It was a good day with milk futures higher. Most contracts posted double-digit gains despite limited movement in the underlying cash. It is difficult to pinpoint what provided strength, other than traders seeing the strength in other markets, resulting in some spillover emotion.

MILK:

The milk production report released last week has not negatively impacted the market despite strong milk output and increased cow numbers in March. The cold storage report was neutral, providing little support. However, traders were friendly to the market overnight and throughout the day. It is uncertain what supported milk futures today, as there was limited movement in the underlying cash. It seems that some of the strength in the outside markets may have provided some confidence for traders to step into the market aggressively. Milk output continues to increase in much of the country as the spring flush continues. Strength in milk futures is not usual during this time of year, as more milk is available.

AVERAGE CLASS III PRICES:

3 Month:	$17.68
6 Month:	$18.41
9 Month:	$18.53
12 Month:	$18.36

CHEESE:

Cheese production is steady as the milk supply is plentiful. Cheese output has been above the previous year for quite some time, according to the monthly dairy products reports, but inventory is slightly below a year ago. This would indicate good demand despite higher food prices across the board. Consumers want cheese and are willing to keep it in their diet.

BUTTER:

The butter price is unable to trend higher consistently. Gains have been limited to a very short time before buyers step back and wait for lower prices. There is no shortage of butter available, with manufacturers wanting to sell supplies at whatever price they can receive.

OUTSIDE MARKETS SUMMARY:

July corn closed up 5.75 cents per bushel at $4.6925, July soybeans closed up 13.50 cents at $11.9200, and July soybean meal closed up $8.70 per ton at $327.80. July Chicago wheat closed up 13.00 cents at $6.2975. June live cattle closed up $3.73 at $248.95. June crude oil is up $2.33 per barrel at $96.73. The Dow Jones Industrial Average is down 63 points at 49,168, with the NASDAQ up 51 points at 24,887.

Monday Midday Dairy Market Summary - Milk Futures Post Strong Gains

OUTSIDE MARKETS SUMMARY:

CORN:	5 Higher
SOYBEANS:	14 Higher
SOYBEAN MEAL:	$9.00 Higher
LIVE CATTLE:	$2.67 Higher
DOW JONES:	97 Points Lower
NASDAQ:	39 Points Higher
CRUDE OIL:	$2.10 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.75 cent, closing at $1.6525 with one load traded. The barrel cheese price remained unchanged at $1.6150. The dry whey price increased 0.50 cent, closing at 70.25 with no loads traded. Class III futures are 1-36 cents higher, with the July contract moving above $19.00. The butter price decreased 1.75 cents to close at $1.6875 with 18 loads traded. The price initially declined to $1.6800 before buyer interest brought it up from the low. Grade A nonfat dry milk remained unchanged at $2.26 with no loads traded. Class IV futures are 5-31 cents higher. Butter futures are 1.35-4.57 cents lower. Dry whey futures are 0.87-2.00 cents higher. Cheese futures are 0.20 cent lower to 2.30 cents higher.

Monday Morning Dairy Market Update - Overnight Dairy Futures Exhibit Strong Activity

OPENING CALLS:

Class III Milk Futures:	5 to 15 Higher
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Higher
Soybean Futures:	4 to 5 Higher
Soybean Meal Futures:	$3 to $4 Higher
Wheat Futures:	4 to 6 Higher

MILK:

There was some trading excitement in the overnight market with both Class III and IV contracts traded. The overnight volume was strong in Class III futures, with the May contract gaining as much as $0.38 and June up $0.37. The May contract had a volume of 220 traded overnight. However, the current bids and offers are below those prices, potentially indicating that the excitement ran its course. The March Cold Storage report should not have triggered the buying interest overnight, as the report was neutral. Milk output remains strong, providing sufficient supply for bottling and manufacturing.

CHEESE:

Cheese inventory in March was below that of March 2025, but supplies are sufficient for demand. Buyers in the spot market have not been very aggressive, as strong milk production will keep cheese production strong. The block cheese price is nearing the top end of the range and may find buyer resistance at that level.

BUTTER:

Traders are expected to exhibit caution in the butter market. The pattern has been that a bounce in price has been short-lived, and the aftermath has been lower prices. It would seem feasible that the current butter price would generate strong buying interest, but sufficient supplies keep buyers unconcerned over supply.