MILK
Class III milk futures held well Monday with support from a higher block price. The market had a negative tone early as lower prices were anticipated, but that idea was quickly put to rest once blocks were bid higher. Even though milk output is strong and increasing seasonally, there is optimism demand will improve as restaurants open, further allowing for more seating capacity, and as people feel more comfortable congregating again. The difficult aspect of this that is hard to determine is how much retail demand will be offset by demand from the food service industry. If people eat out more, that means they will eat less at home. One will offset the other to some degree. Export demand is showing good signs of increased international interest, especially with world prices higher than U.S. prices. Another Global Dairy Trade auction will take place Tuesday, providing information on international prices. Tuesday is the last trading day for February dairy futures and options with the Federal Order prices announced on Wednesday.
AVERAGE CLASS III PRICES
| 3 Month: | $16.39 |
| 6 Month: | $17.11 |
| 9 Month: | $17.42 |
| 12 Month: | $17.45 |
CHEESE
Cheese prices continue to hold well and are content to remain in a somewhat sideways trading pattern. There is some excitement when prices increase, but so far, they have not been able to continue to trend higher. The increased buying for government programs has not been enough to move the market higher as it did last year. More supply is available, and production is steady, allowing for increased orders to be filled easily. There are numerous plants that are running at capacity already and spring flush has not yet taken place.
BUTTER
Price moved to the highest level it has been since July 28, 2020, and has now increased 42.50 cents over the past month. This is incredible given the amount of supply in inventory and the level of current production. It appears that the rule that only butter produced after Dec. 1 is allowed be sold on the CME spot market beginning Monday had a greater impact than anticipated. It is interesting to see that butter futures did not reflect the large move in cash. This might be due to the closest bid under the market after business was accomplished today was way down at $1.50. That could mean a void under the market and the potential for price to fall back down.
OUTSIDE MARKETS SUMMARY
March corn fell 8 cents, closing at $5.4750. March soybeans fell 12.75 cents, closing at $13.9250, with March soybean meal down $3 per ton, closing at $420.20. March wheat fell 11.25 cents, ending at $6.4375. April live cattle lost $1.02, closing at $118.97. April crude oil declined $0.86, closing at $60.64 per barrel. The Dow jumped 603 points, ending at 31,536, while the NASDAQ jumped 396 points, ending at 13,589.
