MILK
It is anticipated and reported that milk production is at peak levels in the Midwest. The real issue will be just how long spring flush-type output will continue. Discounted milk is being offered as usual during this time of year. However, the discounted prices are only $3 to $4 under the market rather than the lower prices usually reported this time of year. It is interesting that milk production is higher than last year, but it seems to be handled without difficulty except for some longer wait times for trucks to unload. The key will be the reaction to escalating feed prices and whether that will reduce milk output. It seems that buyers of cheese in the spot market have been concerned over this and still might be in the long term. However, that was not the case Thursday, as sellers of cheese had a difficult time trying to find buyers. Class III futures reflected the weakness of cheese with June falling the daily limit of 75 cents. There was a pool of 28 contracts wanting to be sold near the end of the day as there could be no more contracts sold with the price locked limit down. This will follow through Thursday evening as the market will reset and there will be an opportunity to trade. Corn was higher again Thursday with new-crop December leading the charge. The focus is turning to getting as many acres planted as possible and weather during the growing season.
AVERAGE CLASS III PRICES
| 3 Month: | $19.05 |
| 6 Month: | $19.23 |
| 9 Month: | $18.97 |
| 12 Month: | $18.71 |
CHEESE
Cheese production continues at a rapid pace with some plants that have capacity taking advantage of spot milk that is moving around at discounted prices. Cheese demand has been good. Foodservice purchasing has leveled off for now as the pipeline of production is filled. There are reports that retail cheese demand is slowing as more people are eating away from home again. The weakness of cheese Thursday is expected to continue Friday, but not to the same extent.
BUTTER
Retail sales of butter are reported to have declined noticeably. This would be expected as demand for butter from the foodservice industry improves. Ice cream production is utilizing more cream, but so far, there is enough for steady butter production as well as other products. Buyers of butter indicate supply is generally available with inventory remaining rather large.
OUTSIDE MARKETS SUMMARY
May corn gained 6.25 cents, ending at $7.5950. May soybeans jumped 23.50 cents, closing at $16.0550, with May soybean meal gaining $3.40 per ton, closing at $427.70. May wheat gained 8.50 cents, closing at $7.6425. June live cattle gained $1.05, closing at $115.47. June crude oil fell $0.92, closing at $64.71 per barrel. The Dow closed 318 points higher at 34,549, while the NASDAQ gained 49 points, closing at 13,362.
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