MILK:
Class III futures tried to hold somewhat Tuesday, but the pressure from lower block cheese and dry whey just could not get any interest from traders to step in and purchase. There is little reason for buyers of cheese to be excited over any tightness developing in the market. Milk production is sufficient to satisfy demand. Weather has been good for cow comfort, which is leaving milk per cow significantly above a year ago. There continues to be significant discussion over the impact of higher feed prices on milk output, but that is not having an impact on the current market. Much of that will depend on crop production this summer. Crop progress showed 90% of the nation's corn planted compared to last year at 87% and a five-year average of 80%. Crop conditions indicated 61% of the crop is in good/excellent condition compared to 56% a year ago. Soybeans are 75% planted compared to 63% a year ago and a five-year average of 54%. There is 63% of the crop in good/excellent condition compared to 54% a year ago. USDA will release the May Federal Order class prices Wednesday, which will be higher than April's prices. The trade anticipates a Class III price of $18.97 and a Class IV price of $16.22.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.82 |
| 6 Month: | $18.33 |
| 9 Month: | $18.27 |
| 12 Month: | $18.16 |
CHEESE:
The weakness of cheese continues to show a bottom has not yet been reached. Traders did not get too excited over the bounce higher in barrels as that has happened a few times only to resume a lower trend. There are plentiful cheese supplies for current demand. Buyers are able to purchase for current needs as well as for expected future demand as sellers continue to offer loads to the market.
BUTTER:
Price continues to hold well as demand from the food service industry continues to utilize a lot of product. Cream supplies are a bit tighter, but there is sufficient supply for demand from various manufactures that utilize cream. Price is 28 cents above block cheese and is expected to hold a substantial premium to cheese for the foreseeable future.
OUTSIDE MARKETS SUMMARY:
July corn jumped 32 cents, closing at $6.8875. July soybeans gained 18 cents, closing at $15.4850 with July soybean meal up $3.20 per ton, closing at $398.70. July wheat jumped 30 cents, closing at $6.9350. June live cattle fell $2.32, ending at $113.55. July crude oil jumped $1.40 per barrel, closing at $67.72. The DOW gained 46 points, closing at 34,575 while the NASDAQ declined 12 points, closing at 13,736 points.
