MILK
Milk futures put in a positive week, closing higher than the end of last week. What is interesting about it is that Class III futures were not really supported by underlying cash. However, Class IV futures were, due to strong gains of underlying cash. This may not make sense unless you understand that cheese and dry whey drive the Class III price with a little help from butter. Butter and nonfat dry milk are the drivers of Class IV milk. More schools will be winding down next week, continuing to move more milk to manufacturing. This will not overwhelm the market as milk production is currently below year-ago levels. Where it could be overwhelming would be due to the lack of a full workforce in many plants limiting the amount of milk they can process. This has been an ongoing issue. The result of this may be an increase in the amount of milk that might be offered on the spot market. Dairy cattle slaughter for the month of April totaled 237,800 head, a decrease of 59,400 head from March and a decrease of 19,700 head from April 2021. In fact, this is the largest decrease in slaughter from March to April going back through 1994 when I began tracking the numbers. The second-largest decline was in 2000 with a decrease of 57,000 head. This is the smallest monthly slaughter since June 2021.
AVERAGE CLASS III PRICES
| 3 Month: | $24.74 |
| 6 Month: | $24.29 |
| 9 Month: | $23.68 |
| 12 Month: | $22.91 |
CHEESE
For the week, blocks increased 7.25 cents will six loads traded. Barrels declined 4.75 cents with 21 loads traded. Dry whey declined 2.50 cents with 21 loads traded. The increase of block cheese price was offset by the decrease of both barrels and dry whey, which, in theory, should have left the market neutral with little change from last week in Class III futures. However, the focus of traders was the fact that block cheese increased and held throughout the week.
BUTTER
For the week, butter increased 14.50 cents with 37 loads traded. Grade A nonfat dry milk increased 7 cents with six loads traded. Price ended the week just shy of the level reached on Feb. 15. Price is heading toward the highest price of the year set on Jan. 21 at $2.9350, 8.50 cents higher than the close Friday. Price has increased five consecutive days and may be due for a price correction soon.
OUTSIDE MARKETS SUMMARY
July corn declined 4.50 cents, closing at $7.7875. July soybeans gained 14.75 cents, closing at $17.0525, with July soybean meal gaining $4.60 per ton, closing at $429.90. July wheat fell 31.75 cents, ending at $11.6875. June live cattle closed $0.07 higher at $131.57. July crude oil gained $0.39, closing at $110.28. The Dow gained 9 points, closing at 31,262, while the NASDAQ declined 34 points, closing at 11,355.
