MILK
Milk futures were very subdued Monday with trading volume very low. June Class III futures showed the most activity with 187 contracts traded, followed by May with 112 contracts traded. The rest of the contracts were substantially fewer as traders were uncertain over price direction or strength. There were wide bid and offers in most contracts throughout the day, which is unusual. More trading is generally done with bids and offers closer together. Much of the attention may have been on plummeting grain futures. Some emphasis has been on the potential for higher milk prices due to escalating feed prices. Taking that away for a day, or possibly even a few days, may take the wind out of the bullish sails. However, grain prices will be very volatile this summer due to lower stocks and strong demand. More acres will need to be planted, and weather will need to be good in order to have feed prices decline. The weekly USDA Crop Progress report shows 67% of the corn crop is in the ground compared to 46% last week and compared to a five-year average of 52%. There is 42% of the soybeans planted compared to 24% last week and a five-year average of 22%. The crops are going in, and with good weather, the crop could be large.
AVERAGE CLASS III PRICES
| 3 Month: | $18.96 |
| 6 Month: | $19.15 |
| 9 Month: | $18.94 |
| 12 Month: | $18.72 |
CHEESE
Barrel cheese price is down to the lowest level it has been since April 16 with blocks continuing to move sideways. There is little to change this market direction for the time being. Milk production remains strong, keeping both bottling and manufacturing satisfied. Current cheese futures indicate the belief is for cheese prices to reach $1.93 in October. It is interesting to see how the volume of trading activity and the open interest in cheese futures has increased substantially from where it was a year ago. There has been more interest in trading cheese contracts.
BUTTER
There are reports that butter demand from the retail sector is decreasing. That stands to reason as demand has increased for the foodservice industry. Ice cream production is utilizing greater volumes of cream, but there remains sufficient supply available for demand from all areas of the industry.
OUTSIDE MARKETS SUMMARY
May corn fell 24.75 cents, closing at $7.48. May soybeans slipped a penny, ending at $16.20, with May soybean meal up $1.90 per ton, closing at $444.40. May wheat fell 31 cents, closing at $7.42.50. June live cattle jumped $2.20, ending at $118.22. June crude oil increased $0.02, closing at $64.92 per barrel. The Dow declined 35 points, closing at 34,743, while the NASDAQ fell 350 points, closing at 13,402.
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