MILK
Milk futures did not react very much to the strong increase of block cheese and butter prices. Milk futures had already factored this in with the strong increases last week. Contracts closed mixed, but after futures prices were settled for the day, continued electronic trading showed additional pressure being put on Class III milk futures with no contracts posting gains near the closing bell. It is unlikely selling will continue in overnight trade due to the strength of spot prices. There is some concern with prices reaching levels at which they retreated from last time. Traders may be more cautious now. The Global Dairy Trade auction Tuesday showed the trade-weighted average increasing 4.2%. This is the fourth consecutive event with an increase. Anhydrous milk fat increased 1.2% to $6,889 per metric ton or $3.12 per pound. Butter increased 5.1% to $6,686 per metric ton or $3.03 per pound. Cheddar cheese increased 3.5% to $5,881 per metric ton or $2.67 per pound. Lactose increased 3.4% to $1,609 per metric ton or $0.73 per pound. Skim milk powder gained 6.0% to $4,295 per metric ton or $1.95 per pound. Whole milk powder increased 4.2% to $4,503 per metric ton or $2.04 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $22.33 |
| 6 Month: | $22.28 |
| 9 Month: | $22.04 |
| 12 Month: | $21.64 |
CHEESE
Block cheese has now moved within 7.50 cents of the high established on Jan. 5. Traders are becoming a bit more cautious as price rises with the potential buyers may not purchase as aggressively at the higher level. Buying is taking place for future demand, but there may be a limit as to how much they will continue to pay and whether higher prices will curtail some demand.
BUTTER
Price has nearly reached back to the level it had been about a month ago. Demand is strong, but production is increasing as well. This may limit upside price potential. However, price on the Global Dairy Trade auction average is $3.03 per pound with the U.S. price now at $2.86. This should keep international interest strong.
OUTSIDE MARKETS SUMMARY
March corn fell 17.75 cents, ending at $6.36. March soybeans fell 18.75 cents, closing at $15.5125, with March soybean meal down $9.60 per ton, closing at $438.80. March wheat fell 19.50 cents, closing at $7.7975. February live cattle increased $0.47 at $142.90. March crude oil fell $3.39, closing at $92.07 per barrel. The Dow gained 423 points, closing at 34,989, while the NASDAQ gained 349 points, closing at 14,140 points.
