MILK
Milk futures closed mixed as there was limited direction from underlying cash. Traders were uncertain whether cheese prices might increase or decrease from here and reflected that in the futures market Monday. Milk futures received a boost from lower milk output during April on the milk production report last week. However, the cold storage report was a bit negative, only in the fact that American cheese stocks increased for the first time this year. Class III milk futures came under increased pressure after the cold storage report was released Monday. Overnight trade may reflect this weakness. Milk production has been running lower but increasing seasonally. Milk receipts continue to increase as spring flush continues. More milk will be available for manufacturing over the coming weeks as schools close for the summer. This will be welcomed by many plants as they might be able to build inventory in preparation for increased demand later in the year. Spot milk is expected to be less expensive for a period as plants may not be able to handle the extra milk due to labor shortages, resulting in increased amounts of extra milk being available. This will not cause a problem for manufacturing capacity as there is ample space available.
AVERAGE CLASS III PRICES
| 3 Month: | $24.75 |
| 6 Month: | $24.33 |
| 9 Month: | $23.70 |
| 12 Month: | $22.94 |
CHEESE
American cheese inventory increased 7.8 million pounds, totaling 836.3 million pounds in April, according to the Cold Storage report. This was the first month-over-month increase for American cheese so far this year. There was a large revision in March, which put inventory 6.2 million pounds higher than what was previously stated with the April increase added to that. Inventory is now 1% above a year ago. Swiss cheese increased 776,000 pounds, totaling 24.0 million pounds. Other cheese stocks increased 6.3%, totaling 620.5 million pounds. This put total cheese inventory at 1.481 billion pounds, up 2% from a year ago.
BUTTER
Butter stocks gained 16.8 million pounds, totaling 299.6 million pounds. The increase was rather light for this time of year, putting stocks 23% below a year ago. Stocks were revised slightly lower for the month of March.
OUTSIDE MARKETS SUMMARY
July corn gained 7.50 cents, ending at $7.8625. July soybeans declined 18.25 cents, closing at $16.87, with July soybean meal down $7.40 per ton, closing at $422.50. July wheat gained 21.25 cents, closing at $11.90. June live cattle gained $1.20, ending at $132.77. July crude oil gained $0.01, ending at $110.29 per barrel. The Dow gained 618 points, closing at 31,880, while the NASDAQ gained 181 points, closing at 11,535.
