MILK
Class III milk futures came to life today after the large increase in block cheese. It was a bit surprising the April contract closed limit up as there was not a huge number of short positions that needed to be covered. However, moderate trading activity magnifies the movement. According to what futures should have moved based on the jump of cheese prices, traders still remain cautious. May and later contracts should have seen limit gains as well following the increase. There was no specific news that surfaced in the market to garner long-term aggressive buying. South Dairy Trade numbers and prices were released today. Dairy products moving through ports in Argentina during the period from January 16-31 totaled 11,566.57 tons moving to 21 destinations at an average price of $4,030.75 per ton. Whole milk powder price increased 0.2% from the previous period to $3,736.32 per ton or $1.70 per pound. Skim milk powder increased 1.3% to $3,639.44 or $1.65 per pound. Semi-hard cheese decreased 0.3% to $4,543.28 per ton or $2.06 per pound. Hard cheese decreased 5.6% to $6,291.42 per ton or $2.86 per pound. Butter increased 1.8% to $4,700.90 per ton or 42.13 per pound. Dairy products moving through ports in Uruguay during February 16-28 totaled 6,722 tons to 23 destinations at an average price of $4,875.17 per ton. Whole milk powder decreased 0.8% to $3,704.67 per ton or $1.68 per pound. Skim milk powder fell 13.4% to $3,759.72 per ton or $1.71 per pound. Semi-hard cheese decreased 2.8% to $4,901.26 per ton or $2.23 per pound. Hard cheese gained 7.6% to $6,129.85 per ton or $2.78 per pound. Butter increased 0.7% to $5,376.69 per ton or $2.44 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $18.36 |
| 6 Month: | $18.76 |
| 9 Month: | $19.08 |
| 12 Month: | $19.06 |
CHEESE
The large move up in block cheese is reminiscent of a similar move higher on January 23. After that large increase, price eventually moved back to the lows from where it began and then moved lower. Hopefully, this will not be a repeat of that time. There is a possibility that price may not be able to hold here as fundamentals have not really changed recently. Price so far has just taken back much of what it lost last week.
BUTTER
Price just hung out today with no business being done. Buyers see no reason to be concerned over supply and sellers are moving supply through regular channels in the country. Buyers are looking ahead and contracting supply out into the third quarter of the year making sure they have their needs covered.
OUTSIDE MARKETS SUMMARY
May corn gained 7.25 cents closing at $6.2075. May soybeans gained 2.50 cents ending at $14.9375 with May soybean meal up $1.90 per ton closing at $481.20. May wheat gained 11.75 cents closing at $6.9625. April live cattle declined $0.50 ending at $163.05. April crude oil fell $3.47 per barrel ending at $71.33. The Dow gained 336 points while the Nasdaq gained 239 points.
