MILK
The strength of Class III futures turned lower once spot trading was finished and cheese prices diverged. The main aspect of the weakness was the inability of both blocks and barrels to hold initial gains. Increasing milk production and higher cheese production will keep sufficient supply available for demand. There is some concern that, once restaurant inventories are to the level required for the present time, orders may slow a bit. There will be much more outdoor dining taking place during the summer, which may bring restaurant demand back more quickly. Many Class III futures contacts lost more ground Monday but continue to hold much of the recent gains. The April contract is beginning to be priced by the trade this week and will try to remain close with underlying cash movement. There is still sufficient time for price to move above $18 unless cash prices carve out a sideways price range, limiting volatility over the next month.
AVERAGE CLASS III PRICES
| 3 Month: | $17.35 |
| 6 Month: | $17.81 |
| 9 Month: | $18.00 |
| 12 Month: | $17.92 |
CHEESE
Milk receipts at plants are increasing with many plants running at capacity. There are sufficient cheese supplies available for demand with restaurant cheese orders slightly increasing. There are plentiful offers of milk loads to cheese plants with some plants unable to take on any more milk. Retail cheese demand is good with demand expected to remain strong now that another stimulus check will be deposited in bank accounts. Traders are a bit cautious over the level cheese prices can achieve in the near term, as inventory is reported to be increasing.
BUTTER
There was anticipation butter price was going to increase Monday, but such was not the case. There seems to be little concern of price falling back very much, but it may be nearing a level at which buyers and sellers may be comfortable doing business for a period. Cream supply is plentiful with no reported problems with oversupply. Churns are busy as demand is strong.
OUTSIDE MARKETS SUMMARY
May corn jumped 10.50 cents, closing at $5.4950. May soybeans gained 6.25 cents, closing at $14.1950, with May soybean meal up $6.70 per ton, closing at $407.40. May wheat gained 6.50 cents, ending at $6.45. April live cattle gained $0.12 cents, ending at $119.12. April crude oil declined $0.22, closing at $65.39 per barrel. The Dow gained 175 points, closing at 32,953, while the NASDAQ gained 140 points, closing at 13,460.
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