MILK:
Class III milk futures took a big hit with only October futures closing above $19.00. Closer contracts have fallen to the lowest level since March 30, the day the huge price rally began. This corresponds very closely with the rise and fall of grain futures as the strong correlation by the trade has resulted in them following the same pattern. It is hard to believe that July Class III futures were over $20.00 just two weeks ago and have fallen nearly $2.00 over that period of time. It was anticipated there would be substantial volatility this year, but to this magnitude is somewhat of a surprise for this time of year. It might be very difficult for closer milk futures to regain the losses anytime soon, if at all. However, we cannot rule anything out in this market. Milk production is strong, but demand remains strong as well and is keeping inventory from building.
AVERAGE CLASS III PRICES:
| 3 Month: | $18.22 |
| 6 Month: | $18.55 |
| 9 Month: | $18.54 |
| 12 Month: | $18.38 |
CHEESE:
American cheese inventory declined 3.6 million pounds for April compared to March. It is somewhat unusual to see a decline like this for this time of year. With this decline, it moves American cheese stocks to 3.5 million pounds below April 2020, totaling 830.8 million pounds. This may seem strange due to demand falling off the face of the earth a year ago. When demand fell, the manufacturing of cheese fell as well due to the lack of demand. But even with the disruption last year, it is positive to see that current inventory is below a year ago, indicating strong demand. Swiss cheese inventory declined 1.5 million pounds to the level of 21.2 million pounds. This is down 18% from a year ago. Other cheese inventory declined 10.7 million pounds to a level of 601.2 million pounds and 3% below a year ago. Total cheese inventory totaled 1.453 billion pounds, down 15.9 million pounds from April 2020 or 2% lower. This is supportive to the market.
BUTTER:
The surprise was the increase of butter stocks from March of 27.9 million pounds. This increase puts stocks 3% above the level it was a year ago. This stands to reason as butter inventory had grown substantially last April due to demand from the food service industry falling dramatically. Even though butter stocks are not much higher than a year ago, it still is the largest inventory since 1993.
OUTSIDE MARKETS SUMMARY:
July corn declined 2.25 cents, closing at $6.5725. July soybeans declined 3.50 cents, ending at $15.2275 with July soybean meal up $1.30 per ton, closing at $400.20. July wheat fell 12 cents, ending at $6.6225. June live cattle declined $0.92, ending at $116.75. July crude oil jumped $2.47, closing at $66.05 per barrel. The DOW gained 184 points, closing at 34,394 while the NASDAQ gained 190 points, closing at 13,661.
