MILK
Significant pressure was put on milk futures even though block cheese and butter prices were higher. The weakness of barrels and nonfat dry milk put pressure on futures with double-digit losses in all contracts except front-month February. With the recent price rally running out of steam in Class III futures one has to wonder if new lows might be achieved again as has been the pattern. South Dairy Trade numbers and prices were released today with the average price of dairy products moving through ports in Argentina December 16-31 at $4,005.77 per ton to 20 destinations with a total of 7,359.09 tons shipped. Whole milk powder increased 2.0% from the previous two-week period at $3,668.09 per ton or $1.67 per pound. Skim milk powder decreased 2.3% to $3,622.20 per ton or $1.64 per pound. Semi-hard cheese increased 0.4% to $4,623.56 per ton or $2.10 per pound. Hard cheese increased 0.5% to $6,256.92 per ton or $2.84 per pound. Butter increased 1.8% to $4,672.87 per ton or $2.12 per pound. Dairy products moving through ports in Uruguay January 16-31 totaled 15,636.76 tons at an average price of $3,875.61 per ton to 27 destinations. Whole milk powder increased 0.8% to $3,745.09 per ton or $1.70 per pound. Skim milk powder declined 5.2% to $3,668.32 per ton or $1.67 per pound. Semi-hard cheese decreased 1.5% to $4,925.63 per ton or $2.24 per pound. Hard cheese decreased 6.7% to $6,387.19 per ton or $2.90 per pound. Butter decreased 0.5% to $5,278.17 per ton or $2.40 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $17.87 |
| 6 Month: | $18.40 |
| 9 Month: | $18.91 |
| 12 Month: | $19.12 |
CHEESE
Prices may continue to chop around for a period as buyers and sellers take care of business. There is no concern over supply with inventory increasing seasonally. Yet, price is attractive for buyers to contract some for later use. This may keep the buyers purchasing on price dips and sellers selling on price increases. Cheese production is steady with milk supply sufficient for demand and then some leaving spot milk below class prices.
BUTTER
Price continues to creep higher as buyers are more aggressive but not yet concerned over supply. It is surprising price has moved this far due to strong butter production. However, with the higher trend, it brings more buyers in from the sideline to purchase to get ahead of further price increases. This may result in price moving higher than current fundamentals would support.
OUTSIDE MARKETS SUMMARY
March corn declined 2.75 cents closing at $6.8225. March soybeans declined 5.25 cents closing at $15.3750 with March soybean meal down $3.00 per ton closing at $501.00. March wheat declined 6 cents closing at $7.86. February live cattle slipped $0.12 ending at $162.15. March crude oil declined $1.06 closing at $79.06 per barrel.
