MILK
Milk futures had an uneventful day. Underlying cash prices did little to get traders excited. The decline of barrel cheese price was about as disappointing as the butter price on Friday. However, the weakness of barrels did not have a devastating impact on milk futures. Futures were unchanged with losses confined to single digits. There is an underlying belief that milk prices will remain high due to strong grain prices. Even if there is weakness of underlying cash, milk futures might see only minimal losses as the bias is to the upside. Current strong milk production, which has many plants running at capacity, is not bearish to the market at the present time. The anticipation is that demand will increase, and milk production will decrease as the year moves forward. Cheese inventory is increasing, but not to the extent that it is placing substantial pressure on the market. Spring flush is taking place in much of the country, and so far, there are no reports of milk being dumped. USDA will release the March Dairy Products report Tuesday. The Global Dairy Trade auction will also take place Tuesday. Corn planting is 46% complete compared to 48% last year and a five-year average of 36%. Soybean planting is 24% complete compared to 21% a year ago and a five-year average of 11%.
AVERAGE CLASS III PRICES
| 3 Month: | $18.82 |
| 6 Month: | $19.23 |
| 9 Month: | $19.09 |
| 12 Month: | $18.82 |
CHEESE
Buyers and sellers seem to be comfortable doing business at the current price level. Buyers are exercising caution as they are not convinced prices are going to escalate and do not want to be holding any more inventory than they need to at the present time. Sellers are willing to let go of product and unwilling to hold any extra inventory than they need to. Thus, the market is somewhat balanced. The Dairy Products report is expected to show increased production of cheese for March.
BUTTER
Price seems to be slowly trending lower after reaching a top in April. Demand from the foodservice industry remains strong and is expected to remain strong as well as potentially increase. There is an indication inventory is increasing again at a greater pace than it did in March. If that is the case, then the price may have reached a top for a period of time.
OUTSIDE MARKETS SUMMARY
May corn declined 6 cents, closing at $7.34. May soybeans declined 10.75 cents, closing at $15.6925, with May soybean meal down $9.80 per ton, closing at $416.20. May wheat fell 14 cents, ending at $7.2850. June live cattle fell $1.47, ending at $115.10. June crude oil gained $0.72, closing at $64.50 per barrel. The Dow increased 238 points, closing at 34,113, while the NASDAQ declined 678 points, closing at 13,895.
