MILK
Milk futures took a big hit Monday with contracts posting large losses in Class III futures with moderate losses in Class IV contracts. May Class III closed the 85-cent limit down, ending at $24.16 and a long way from the high of $25.55 it reached just two days ago. A huge element prevalent in this market is emotion. Traders are wound up, and any movement, even if it is minor, garners substantial volatility. The overall bias of traders is bullish, which creates heightened volatility on any price weakness. The weakness in not expected to last very long, but it could indicate price may have found a level of resistance for the time being. Class III milk futures may have a difficult time moving back above $25 over the near term. Class IV futures are not quite as bearish and have less price swings, but underlying cash may keep price potential confined unless butter and nonfat dry milk can resume an uptrend.
AVERAGE CLASS III PRICES
| 3 Month: | $23.37 |
| 6 Month: | $23.64 |
| 9 Month: | $23.55 |
| 12 Month: | $23.18 |
CHEESE
Cheese prices really were not that weak Monday with only blocks closing lower. Yet, the market reacted violently to the downside. Spot trading activity was likely just buyers and sellers taking care of business and likely not an indication of trend. Cheese production remains strong with plants welcoming more milk due to schools closing down for spring break. Spring flush is beginning with no concern from manufacturers over handling the volume of milk that will be available.
BUTTER
Price seems to be content to remain in a range. Supply is available and inventory is growing from month to month. However, little progress is being made to build inventory in relation with a year ago. Export demand is expected to remain strong. Domestic demand is steady with food service demand slowing a little.
OUTSIDE MARKETS SUMMARY
May corn declined 5.50 cents, closing at $7.4850. May soybeans fell 46 cents, closing at $16.6425, with May soybean meal down $9 per ton, closing at $478.90. May wheat fell 45.25 cents, closing at $10.57. April live cattle closed $0.17 lower, ending at $140.30. May crude oil fell $7.94, closing at $105.94 per barrel. The Dow gained 95 points, closing at 34,956, while the NASDAQ gained 186 points, closing at 14,355.
