MILK
Substantial price swings have become normal for the milk market as traders are attempting to follow patterns of last year only to find those patterns are not being followed by the market. This puts a greater sense of confusion in the market, resulting in greater volatility. Despite some of the negative movement of underlying cash, world prices are doing rather well. The Global Dairy Trade auction trade-weighted average increased 4.8%, making it the fifth consecutive auction posting gains. The only category that showed a slight loss was cheddar cheese with a decline of 0.3% to $4,082 per metric ton, or $1.85 per pound. Anhydrous milk fat jumped 17.2% to $5.398 per metric ton, or $2.45 per pound. Butter increased 4.6% to $4,735 per metric ton, or $2.15 per pound. Lactose gained 6.6% to $1,173 per metric ton, or $0.53 per pound. Skim milk powder gained 7.0% to $3,243 per metric ton, or $1.47 per pound. Whole milk powder gained 2.2% to $3,380 per metric ton, or $1.53 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $17.77 |
| 6 Month: | $17.82 |
| 9 Month: | $17.77 |
| 12 Month: | $17.69 |
CHEESE
There was anticipation cheese prices would be much higher than they currently are. Traders believed that the purchasing of cheese for the Food Box program would push price steadily higher as they did last year. That has not happened so far, creating some confusion as to why this has not yet had an impact on the spot market. The simple conclusion could be that the supplies are in a better position to fill demand than they were last year. However, the explanation may be more complex than that which may have to do with the volumes of certain varieties of cheese that may be utilized in these boxes as well as other considerations.
BUTTER
The jump in butter was certainly a surprise due to the direction the market was heading. Butter futures did not change much, closing the day mixed as traders think this may be just another flash in the pan. It will be interesting to see of more sellers show up Wednesday to take advantage of the higher price.
OUTSIDE MARKETS SUMMARY
March corn declined 5.50 cents, ending at $5.26. March soybeans fell 31 cents, ending at $13.8575, with March soybean meal down $12.70 per ton, closing at $450.50. March wheat declined 3.25 cents, ending at $6.7225. February live cattle gained $0.55, closing at $113.32. February crude oil gained $0.98, ending at $52.98. The Dow gained 116 points, closing at 30,931, while the NASDAQ gained 199 points, ending at 13,197.
