MILK
Milk futures pushed higher and then remained with double-digit gains through the close. Cheese prices were mixed, which did little to change the price calculation. But the fact that they held, and that dry whey bounced back a good amount from last week, was enough to extend the bullish momentum from Friday. The market has digested the milk production and cold storage reports and is looking ahead to upcoming demand and the potential for milk production. Right now, milk production is strong, and even with high grain prices, it will not be affected in the near term. There is feed on farms, and planting will continue as time progresses. The concern for corn and soybeans is the dryness in Brazil and some areas of the U.S. as well as the delay in planting so far. Corn planting progress is currently at 17% completed compared to 24% a year ago and 20% for the five-year average. Soybean planting is 8% complete compared to 7% a year ago and a five-year average of 5%. Soybeans are on a good pace, but corn is causing enough concern to push price higher. It is early, and there is no way of knowing how the weather will be throughout the growing season.
AVERAGE CLASS III PRICES
| 3 Month: | $18.79 |
| 6 Month: | $19.10 |
| 9 Month: | $18.99 |
| 12 Month: | $18.74 |
CHEESE
Barrel cheese weakness offset an increase of blocks, leaving pricing somewhat neutral. However, the gain of dry whey provided strong support under the market. Buyers of cheese are being proactive and are looking to increase ownership of product as a hedge against the potential of tightening milk supply and rising product prices. There are currently plentiful milk supplies with no indication of a tightening market. However, the perception and possibility are there and are having an influence on the market.
BUTTER
Cream supply varies. Western cream is available, while supply is tightening in some other areas of the country where ice cream manufacturing is increasing. However, even though supply is tightening, there is sufficient available for churning. The price for available cream is increasing. Foodservice industry demand is strong and continues to increase much faster than anticipated. There have been some rumblings that export interest is just beginning to slow due to higher prices.
OUTSIDE MARKETS SUMMARY
May corn jumped 25 cents, closing at $6.8050. May soybeans jumped 29.25 cents, closing at $15.69, with May soybean meal up $6.40 per ton, closing at $428.80. May wheat jumped 29.25 cents, closing at $7.3950. April live cattle gained $0.65, ending at $118.50. June crude oil increased $0.10, closing at $52.76 per barrel. The Dow slipped 62 points, ending at 33,982, while the NASDAQ gained 122 points, closing at 14,139.
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