MILK
Class III milk futures took a beating again Monday. Lower cheese prices did not provide support, leaving traders disappointed and liquidating their positions. The bullish attitude that had been present in the market to the middle of last week has evaporated with futures back down to where they were a week ago. It is possible the market may remain in a wide sideways trading range for a time. Traders may be realizing that milk production may not tighten any time soon. The idea of higher corn price having an immediate influence on milk prices is falling on the back burner for now. There are no indications farmers are stepping up culling to reduce herd size. If anything, they may be stepping up culling, but retaining herd size. Corn planting in the country is now 80% complete compared to 78% a year ago and a five-year average rate of 68%. Soybean planting is 61% complete compared to 51% last year and 37% for the five-year average.
AVERAGE CLASS III PRICES
| 3 Month: | $19.06 |
| 6 Month: | $19.22 |
| 9 Month: | $18.97 |
| 12 Month: | $18.72 |
CHEESE
Block cheese price has fallen to the lowest level since March 24 and near the bottom end of the price range it has been in since the middle of March. The fact that buyers have stepped back recently allowing price to fall does not bode well for the market. Demand continues to remain good, but sufficient supply is available to the market. Buyers did step up to the plate at the low prices for blocks and barrels Monday, which could indicate a level at which buyers may step up, but that remains to be seen.
BUTTER
The decline of butter Monday, eliminating half of the gains of last week, could turn sellers more aggressive. There is indication butter inventory is building, but it is getting to the time of year during which butter production slows and inventory needs to be dipped into to satisfy demand. The problem is that there is a lot of inventory that needs to be reduced. USDA will release the April Cold Storage report a week from now providing some idea as to what has been taking place.
OUTSIDE MARKETS SUMMARY
July corn gained 8.75 cents, closing at $6.5250. July soybeans gained 1.25 cents, ending at $15.8750, with July soybean meal down $3.60 per ton, closing at $414.90. July wheat declined 7.50 cents, closing at $6.9975. June live cattle gained $0.05, ending at $115.35. June crude oil gained $0.90 per barrel, closing at $66.27. The Dow declined 54 points, while the NASDAQ lost 51 points.
