MILK
It has been another strong week for Class III futures with April pushing above $20.00 and June pushing above $19.00 at one point. These contracts did not hold those levels but did close with double-digit gains. The milk production report this week was somewhat bearish while the cold storage report was somewhat bullish. Traders favored the bullish side due to the aggressive buyer interest of underlying cash cheese. Some manufacturers indicate they are challenged to keep up with demand as orders have improved. This is surprising due to the fact that spot milk continues to be sold at a substantial discount to class. However, this is not so much due to strong demand, but rather the impact of a reduced workforce. Many plants continue to indicate they are making cheese at the capacity of their current workforce rather than at plant capacity. That is why spot milk has remained as low as $10.00 or as much as $12.00 below class since the end of last year. This also explains why cheese inventory is not increasing seasonally. It is not that demand is balanced or higher than supply. It is that cheese production has been limited relative to milk supply. It will be interesting to see how this will further impact the market.
AVERAGE CLASS III PRICES
| 3 Month: | $19.05 |
| 6 Month: | $19.04 |
| 9 Month: | $19.23 |
| 12 Month: | $19.19 |
CHEESE
For the week, blocks increased 10.25 cents with 14 loads traded. Barrels only increased 0.25 cent with 19 loads traded. There was volatility in barrels but price showed weakness earlier in the week. Dry whey price declined 1.50 cents with five loads traded. Block price is at the highest level it has been since January 11. Barrels are at the highest level since November 17, 2022. Buyers have been trying to outbid each other to gain ownership of product.
BUTTER
Price has not been following the same pattern as cheese. Butter only holds a 14.50 cents premium to butter and is the closest it has been since early in the year. For the week, butter declined 5.50 cents with 11 loads traded. Grade A nonfat dry milk declined 3.75 cents with three loads traded. This has put pressure on Class IV futures with contracts closing lower for the week.
OUTSIDE MARKETS SUMMARY
May corn jumped 11.25 cents closing at $6.43. May soybeans gained 8.75 cents closing at $14.2825 with may soybean meal up $6.80 closing at $445.10 per ton. May wheat gained 26.50 cents closing at $6.8850. April live cattle gained $0.85 ending at $163.00. May cure oil declined $0.70 closing at $69.26 per barrel. The Dow gained 132 points closing at 32,238 while the Nasdaq gained 37 points closing at 11,824.
