MILK
Class III milk futures took a breather Monday, as the spot market did not provide any real price direction. It is anticipated any price retracement will be short lived under the current market fundamentals. However, there can always be something unforeseen that can have a substantial impact on the market. We know there will not be a large increase in cow numbers anytime soon. Production per cow may improve, but the improvement may be limited. Milk production is likely to remain below a year earlier for a period. Eventually, the market will change, and higher milk prices will spur increased production over time. However, the increased cost of production and tighter replacement numbers will result in stability at best for a while. Corn futures for both May and July moved above $8 per bushel Monday. This may continue to underpin the milk market as well. The corn crop is 4% planted, according to the weekly USDA Crop Progress report. This compares to 7% a year ago and a five-year average of 6%. Soybeans are 1% planted versus a five-year average of 2%. Winter wheat crop condition is 30% good/excellent compared to 53% a year ago.
AVERAGE CLASS III PRICES
| 3 Month: | $24.89 |
| 6 Month: | $24.71 |
| 9 Month: | $24.39 |
| 12 Month: | $23.85 |
CHEESE
Block cheese price made a new high again and the highest price since Nov. 5, 2020. Buyers continue to seek ownership of cheese to satisfy current demand as well as increase inventory for use later in the year. So far this year, inventory of American cheese has not yet been able to increase as it usually does. Demand has been strong with manufacturers trying to increase supplies. Buyers have been purchasing in advance of demand increasing ownership for later in the year.
BUTTER
Plants have been able to keep up with demand and then some, which has allowed inventory to increase. This has kept price in a range so far this year. Current fundamentals do not suggest any significant change in the near term.
OUTSIDE MARKETS SUMMARY
May corn jumped 23 cents, closing at $8.1325. May soybeans jumped 32.50 cents, closing at $17.1475, with May soybean meal up $4.50 per ton, closing at $466. May wheat jumped 24 cents, closing at $11.2050. April live cattle declined $0.20, closing at $140.47. May crude oil gained $1.26, ending at $108.21 per barrel. The Dow declined 40 points, closing at 34,412, while the NASDAQ declined 19 points, closing at 13,332.
