MILK
Class III milk futures have been slowly eroding due to the underlying cash calculation decreasing on nearly a daily basis. The July contract has now slipped below $18 and has been eroding daily for the past 1 1/2 weeks. Buyers of cheese have been less aggressive, and there has been less activity on the daily spot market. Business is being done in the country through other channels reducing or eliminating the need of buyers or sellers to come to the spot market on the CME to accomplish business. Fundamentals do not indicate any tightening of milk supply or product availability. So, without any concern in the market, there is no reason for buyers to be aggressive. There is no concern over tightening supply for the foreseeable future. Weather has been conducive for cow comfort, increasing output per cow. Farmers hold out high hopes for a good year and intend to push milk production to maintain or increase cash flow. Last year was a good year financially for most prompting improvements to facilities and the overall operation. Some have embraced the use of technology to improve management.
AVERAGE CLASS III PRICES
| 3 Month: | $16.81 |
| 6 Month: | $17.37 |
| 9 Month: | $17.66 |
| 12 Month: | $17.66 |
CHEESE
Reports of cheese demand are mixed. Curd demand is reported by some to have stalled to some extent. This is likely due to the food service pipeline being replenished to a desired level for now. One might believe the increase of demand from the food service industry should be increasing overall demand. However, if more people eat meals away from home, there will be a decrease of retail demand. This may keep overall demand somewhat steady. It then is possible the market might be oversupplied for a short period of time as cheese production increases.
BUTTER
Price has been moving in a sideways range since the beginning of March. The positive aspect is that price is holding at the higher level, indicating there is solid support for the time being. Cream supply is variable across the country with churning continuing to remain active. Retail demand for the Passover/Easter season has been satisfied for the most part as consumers have already prepared for the season.
OUTSIDE MARKETS SUMMARY
May corn gained 2.25 cents, closing at $5.5125. May soybeans gained 5.75 cents, closing at $14.2325, with May soybean meal up $2.20 per ton, closing at $398.80. May wheat gained 7.50 cents, ending at $6.3475. April live cattle increased $0.35, closing at $119.12. May crude oil fell $3.80, ending at $57.76 per barrel. The Dow fell 308 points, closing at 32,423, while the NASDAQ fell 150 points, closing at 13,228.
