MILK:
Milk futures showed quite a bit of pressure due to the weakness of underlying cash. Some contracts hit limit down, but no contracts remained there. Futures are falling as fast or faster than they increased. It was surprising futures went as high as they had as quickly as they had, and now it is surprising the opposite is true. Buyers are not really interested in buying the break. The milk production report Monday was neutral to the market, but it did show that the production may be stabilizing after the period of decline. Fourth-quarter milk production was down 0.1% with annual milk production up 1.4%. There were 14 of the top 24 states showing declines in milk production for the month. The largest decline took place in New Mexico with a loss of 15.0%. Washington declined 7.3%. Both Florida and Illinois declined 5.2%. The rest of the states showed declines of less than 4.0%. The state with the largest increase was South Dakota with a gain of 20.0% over the previous year. Texas gained 3.4%. Georgia increased 2.6% and California gained 2.2%. The rest of the states with increases showed gains of less than 2.0%.
AVERAGE CLASS III PRICES:
| 3 Month: | $20.33 |
| 6 Month: | $20.02 |
| 9 Month: | $20.64 |
| 12 Month: | $20.53 |
CHEESE:
Buyers of cheese are content to sit on the sidelines for now. They purchased aggressively and ahead of time to make sure they had sufficient supply on hand as well as to make sure they had product when needed due to production and delivery problems. Now they do not need to purchase as aggressively and are purchasing as they need to fill orders. There are reports that cheese orders have slowed as well.
BUTTER:
One has to wonder whether the top is in for butter price. It could follow a similar pattern as cheese. Buyers purchased ahead of time and are now comfortable with current supplies. Churning is increasing as cream is more available. It will take time before inventory moves back up to where it had been earlier last year.
OUTSIDE MARKETS SUMMARY:
March corn slipped a penny, closing at $6.20. March soybeans gained 4.25 cents, ending at $14.0725, with March soybean meal down $1.90 per ton, closing at $392. March wheat jumped 17.50 cents, ending at $8.18. February live cattle gained $0.77, ending at $137.10. March crude oil jumped $2.29 per barrel, closing at $85.60. The Dow declined 67 points, ending at 34,298, while the NASDAQ declined 316 points, closing at 13,539.
