MILK
Class III milk futures took a hit Tuesday with April, May and June experiencing the greatest pressure. What is surprising is that April did not see as much pressure as May. April is still wide open for influence from underlying cash price movement. The contract is being priced but is in the early stage of it. More trading activity took place in the May contract. It is interesting that trading activity was not as heavy on the weakness Tuesday as it was when cheese prices were strengthening. South Dairy Trade prices were released Tuesday for dairy products moving through ports in Argentina and Uruguay over the two-week period. There were 11,566.57 tons of dairy products moving through ports in Argentina to 21 destinations at an average price of $4,030.75 per ton during the period of Feb 1-15. Whole milk powder price increased 0.8% from the previous report to $3,767.28 per ton or $1.71 per pound. Skim milk powder decreased 1.3% to $3,592.30 per ton or $1.63 per pound. Semi-hard cheese increased 1.8% to $4,625.70 per ton or $2.10 per pound. Hard cheese decreased 1.4% to $6,206.27 per ton or $2.82 per pound. Butter increased 2.7% to $4,828.00 per ton or $2.19 per pound. Buttermilk pounder increased 32.5% from the previous period to $2,650 per ton or $1.20 per pound. Dairy products moving through ports in Uruguay over the period March 1-15 totaled 6,539.64 tons to 23 destinations at an average price of $3,835.09 per ton. Whole milk powder decreased 2.5% to $3,610.95 per ton or $1.64 per pound. Skim milk powder decreased 6.6% to $3,513.10 or $1.60. Semi-hard cheese declined 1.3% to $4,836.17 per ton or $2.20 per pound. Hard cheese increased 3.8% to $6,360.44 per ton or $2.89 per pound. Butter decreased 1.3% to $5,305.28 per ton or $2.41 per pound.
Average Class III Prices
| 3 Month: | $18.72 |
| 6 Month: | $18.74 |
| 9 Month: | $18.99 |
| 12 Month: | $19.00 |
CHEESE
Traders seem to think there may be some limitation to the downward move of cheese prices due to most of the selling pressure is April through June contracts. This would coincide with the spring flush period. However, the weakness of prices Tuesday may keep buyers sidelined for a period as upward price movement may have gotten out of hand based on supply and demand. It is likely spot milk will see another week of discounts upward of $10 to class to stimulate manufacturer buying interest.
BUTTER
The strength of butter price was welcomed, as buyers were more aggressive. However, the inability of price to hold the highs during spot trading may suggest limited upside potential. Buyers and sellers are comfortable at the current price range.
OUTSIDE MARKETS SUMMARY
May corn declined by a penny, closing at $6.4725. May soybeans jumped 25.50 cents, ending at $14.6775, with May soybean meal up $11.90 per ton, closing at $457.90. May wheat gained 1.75 cents, closing at $6.9975. April live cattle gained $0.05, ending at $164.95. May crude oil gained $0.39, closing at $73.20 per barrel. The Dow slipped 38 points, closing at 32,394, while the NASDAQ declined 53 points, closing at 11,716.
