MILK
Milk futures showed some significant strength this week along with a significant amount of volatility. Much of the strength came from traders' perception of stronger prices and the possibility prices may be near or have found a bottom. Interestingly enough, spot prices really did not change very much from what they had been a week ago. Milk production remains mostly steady across much of the country. Demand for bottled milk has been steady. Spot milk remains available in the Central region of the country and as much as $10.00 below class. It has been this way for the past six weeks, which is very unusual to remain this way for this length of time after the end of the year holidays. Production remains above year-ago levels but that is moving more in line with last year. Much will depend on whether cow numbers will continue to decline or if last month was just a one-off month and cow numbers will remain steady.
AVERAGE CLASS III PRICES
| 3 Month: | $18.13 |
| 6 Month: | $18.65 |
| 9 Month: | $19.13 |
| 12 Month: | $19.28 |
CHEESE
Looking at the price movements of Class III futures this week, one would have thought cheese prices moved higher. However, that was not the case. For the week, block declined 0.25 cents with seven loads traded. Barrels declined 5.50 cents with 26 loads traded. Even with the weakness, traders bought milk futures as the attitude may have changed to being less bearish. It will be interesting to see if milk futures will be able to hold the gains if cheese prices remain choppy.
BUTTER
For the week, butter increased 3.75 cents with nine loads traded. Grade A nonfat dry milk gained 2 cents with 10 loads traded. It seemed as if nonfat dry milk gained more than it had. Price fluctuated during the week and the fluctuation resulted in significant strength in Class IV futures moving most contracts above Class III futures again.
Outside Markets Summary
March corn gained 9.75 cents closing at $6.8050. March soybeans jumped 23.25 cents closing at $15.4250 with March soybean meal gaining $3.90 closing at $499.40 per ton. March wheat jumped 28.75 cents closing at $7.86. February live cattle gained $0.37 closing at $161.20. March crude oil gained $1.66 closing at $79.72 per barrel. The Dow gained 169 points closing at 33,869 while the Nasdaq declined 71 points closing at 11,718.
