MILK
Class III futures closed mostly lower except for front-month May and then the November and December contracts. The June contract has fallen $1.17 over the past three days. It may have a difficult time recovering from this due to the weakness of cheese. The Global Dairy Trade auction took place Tuesday with the trade-weighted average slipping 0.2%, making it the third consecutive event with a slight decline. Anhydrous milk fat declined 0.1% to $5,730 per metric ton or $2.60 per pound. Butter declined 2.2% to $4,929 per metric ton or $2.24 per pound. Cheddar cheese gained 1.0% to $4,321 per metric ton or $1.96 per pound. Lactose gained 1.6% to $1,251 per metric ton or $0.57 per pound. Skim milk powder gained 0.7% to $3,447 per metric ton or $1.59 per pound. Whole milk powder declined 0.2% to $4,123 per metric ton or $1.87 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $18.83 |
| 6 Month: | $19.03 |
| 9 Month: | $18.84 |
| 12 Month: | $18.60 |
CHEESE
The weakness of cheese over the past few days has been a surprise. Buyers picked up supply but let the sellers offer lower prices before they purchased them. Sellers needed to move product and wanted to do it even at lower prices. This could indicate supplies are building and/or demand is slowing. Cheese has now moved quite a bit below butter, which is bringing Class IV milk futures quite a bit closer to Class III prices.
BUTTER
The market has more support under it than cheese. This is somewhat surprising due to the larger inventory it has. However, with strong demand from the foodservice industry with more restrictions lifted and outdoor dining increasing as the weather warms, demand will likely increase further. The market is comfortable with greater inventory levels as a cushion against a possible tight market sometime in the future. After all, butter can be frozen and then thawed out and used later when the need arises.
OUTSIDE MARKETS SUMMARY
July corn gained 5.75 cents, closing at $6.5825. July soybeans fell 13.25 cents, closing at $15.7425, with July soybean meal down $4.10 per ton, closing at $410.80. July wheat declined 1.75 cents, closing at $6.98. June live cattle jumped $1.40, closing at $116.75. June crude oil fell $0.78, ending at $65.49 per barrel. The Dow fell 267 points, closing at 34,061, while the NASDAQ fell 75 points, closing at 13,304.
