MILK
Class III futures were unchanged to higher in all contracts except March and April 2022. The strength of barrels offset the weakness of blocks, allowing for some selling pressure to be lifted from the market. It is unclear whether cheese prices have found a bottom, but more aggressive buying in barrels was certainly a welcome sight. The Office of the U.S. Trade Representative had made a formal request for a dispute settlement panel to challenge Canada's dairy tariff-rate quotas. The panel will pursue and hopefully rectify the inequalities and ensure that Canada will uphold its commitment as specified under the Unites States-Mexico-Canada (USMCA) agreement that began in July 2020. This should result in the realization of the full benefits of the trade agreement and open up for more dairy products to move to Canada. Dairy cattle slaughter in April fell quite significantly from March. Dairy cattle slaughter totaled 257,500 head, a decline of 44,700 from March and 21,900 below April 2020.
AVERAGE CLASS III PRICES
| 3 Month: | $18.29 |
| 6 Month: | $18.61 |
| 9 Month: | $18.60 |
| 12 Month: | $18.43 |
CHEESE
The inability of block cheese price to hold the gain Tuesday during spot trading does not bode well for price. The minor gains of Class III futures indicate traders remain cautious over price strength. The April Cold Storage report provided a positive demand picture for cheese, which will hopefully not be a one-month event only to see supplies build again. Milk production remains strong, leaving plenty of milk available for manufacturing.
BUTTER
Demand is steady from the foodservice sector now that supply pipelines have been filled. Reports are that retail demand is slower, which stands to reason as more people are going out to eat again. Cream has been sufficient to meet manufacturing needs for both ice cream and butter with few plants selling cream due to market price and demand.
OUTSIDE MARKETS SUMMARY
July corn fell 37 cents, closing at $6.2025. July soybeans lost 11 cents, ending at $15.1175, with July soybean meal down $13.90 per ton, closing at $386.30. July wheat declined 5.75 cents, ending at $6.5650. June live cattle slipped $0.02, closing at $116.72. July crude oil gained $0.02, ending at $66.07. The Dow declined 82 points, closing at 34,312, while the NASDAQ slipped 4 points, ending at 13,657.
