MILK
Dairy Market News reports milk production in California to be mixed with lower supplies in the Central Valley while other areas of the state show steady to slightly higher levels of production over the past week or so. The impact of the heavy rains early in the year has been alleviated with lots of drying out. Some spot loads are making their way into the state filling demand for plants that are short of supply. Some of these loads are being offered slightly below class. Much of the rest of the country is seeing steady to slightly higher milk production. Even with cow numbers decreasing from November as indicated on the December milk production report, milk supply is sufficient for demand with spot milk holding a surprising discount to class in many areas. Bottling demand remains steady. Milk futures are struggling to maintain support with traders turning back to a more bearish attitude as prices remain choppy.
AVERAGE CLASS III PRICES
| 3 Month: | $17.82 |
| 6 Month: | $18.33 |
| 9 Month: | $18.84 |
| 12 Month: | $19.04 |
CHEESE
There was a good amount of activity during spot trading for barrels. Sellers wanted to move production and buyers found it attractive to purchase what was available. This kept the market in a tight range today. Cheese does not seem to have the support to move higher but continues to fluctuate. This took the steam out of the market moving milk futures back down near the lows. Strong cheese production is meeting demand and then some with inventory expected to have increased in January.
BUTTER
Buyers and sellers had no specific opinion in the market today. Neither showed up to do any business with potentially each side waiting for the other to make a move. The weakness of nonfat dry milk put some pressure on Class IV futures. Butter production is strong with supply meeting demand with excess moving to inventory. Buyers are purchasing some for future demand but are not aggressive with those purchases due to availability.
OUTSIDE MARKETS SUMMARY
March corn slipped 0.25 cent closing at $6.76. March soybeans gained 0.75 cent closing at $15.2650 with March soybean meal up $0.30 per ton closing at $491.40. March wheat declined 4.25 cents closing at $7.65. February live cattle gained $0.22 closing at $162.77. March crude oil declined $0.10 ending at $78.49 per barrel. The Dow fell 431 points closing at 33,697 while the Nasdaq lost 215 points closing at 11,856.
