MILK
Class III milk futures came under pressure following the weakness of cheese prices. The June contract fell $1.23 since the close last Friday, ending at the lowest level since March 30. It is interesting to see how futures jumped the following day on March 31 because of the sharp rise of grain prices as a result of the Prospective Plantings report. It was the beginning of trader perception of higher grain prices reducing milk production and tightening milk supply. That has been generally correct, but it does not happen immediately. Traders just wanted to get in on the ground floor of the price increase. Block cheese price actually declined on that day. The sharp gains of the following two weeks pushed June futures $2.19 higher. The market has now nearly eliminated all of that gain. Milk production in April was strong with an increase of 3.3% in the country. There were seven of the top 24 states that showed a decrease in milk production from a year ago. Florida declined 5.3%, Vermont declined 2.7%, Virginia declined 2.3%, Washington declined 1.4%, Utah was down 1.1% and Pennsylvania was down 1.0%. The strongest gain was seen in South Dakota with an increase of 13.4% followed by Indiana with an increase of 11.4%. The top two states of California and Wisconsin increased 4.1% and 4.6%, respectively.
AVERAGE CLASS III PRICES
| 3 Month: | $18.66 |
| 6 Month: | $18.94 |
| 9 Month: | $18.83 |
| 12 Month: | $18.61 |
CHEESE
For the week, cheese prices took a large hit. Blocks fell 15.50 cents with 33 loads traded. Barrels fell 12.25 cents with 46 loads traded. Dry whey was the only category that showed a gain. Price increased 0.50 cent with five loads traded. Both block and barrels have broken out of the sideways price ranges they had been in, moving to levels they had not been for some period of time.
BUTTER
For the week, butter declined 0.50 cent with 15 loads traded. Grade A nonfat dry milk price declined 0.25 cent with 13 loads traded. Churning remains active as there is sufficient cream supply for ice cream and the production of other products as well as butter production. USDA will release the April Cold Storage report on Monday, which is anyone's guess as to what the level of inventory will be for butter. Increased demand from the foodservice industry was partially offset by slowing retail demand.
OUTSIDE MARKETS SUMMARY
July corn declined 5 cents, closing at $6.5950. July soybeans declined 7 cents, closing at $15.2625, with July soybean meal down $2.20 per ton, closing at $398.90. July wheat slipped a penny, ending at $6.7425. June live cattle jumped $1.07, closing at $117.67. July crude oil jumped $1.64, closing at $63.58 per barrel. The Dow gained 124 points, closing at 34,208, while the NASDAQ declined 65 points, closing at 13,471
