MILK
It seems bullish traders have thrown in the towel for the time being as underlying prices continue to show overall weakness. Milk production is improving seasonally, but production certainly is not overwhelming the market. Overall milk prices should remain supported, but prices may have been too high based on current fundamentals. All farmers would like to see much higher prices, and in reality, prices are higher historically. However, significant increases in the cost of production do not make it as profitable as it looks. The income-over-feed price for the month of March indicates strong income over the cost of feed, but that is not a real picture of profitability in the current market situation. It does provide a benchmark that we can look at as far as income over feed is concerned at current prices. Milk prices are not expected to fall apart but may have a further price retracement before buyers may step back up to the plate in the spot market. Corn planting is 14% complete compared to 42% a year ago and a five-year average of 33%. Soybean progress is at 8% complete compared to 22% a year ago and a five-year average of 13%.
AVERAGE CLASS III PRICES
| 3 Month: | $24.29 |
| 6 Month: | $24.00 |
| 9 Month: | $23.56 |
| 12 Month: | $22.95 |
CHEESE
Cheese prices have resumed some of their weakness as sellers are bringing supply to the market while buyers hold back waiting to purchase at lower prices. It is uncertain just how much further prices will weaken, but the consensus is that downside risk might be limited. Cheese futures are not keeping any premium in the market but are declining right along with the decline of spot prices. Traders see no reason to keep premium in the market.
BUTTER
Some slowing of retail demand is being seen, but is nothing to get too excited about. Buyers continue to purchase for orders that are being placed for later in the year as well as increasing ownership for expected demand through the end of the year. There is little concern over supply at present with churning remaining rather active.
OUTSIDE MARKETS SUMMARY
May corn declined 5.25 cents, closing at $8.13. May soybeans fell 34.25 cents, closing at $16.74, with May soybean meal gaining $2.40 per ton, closing at $442.90. May wheat slipped 0.25 cent, ending at $10.4350. June live cattle jumped $2.55, closing at $135.20. June crude oil gained $0.40, closing at $105.17 per barrel. The Dow gained 84 points, closing at 33,062, while the NASDAQ gained 201 points, ending at 12,536.
