MILK
Closer Class III futures moved higher in response to the higher block cheese price. Increases were confined to the April, May, and June contracts. Later contracts were under pressure with some posting double-digit losses. Milk production is steady to higher in many areas as weather turns milder improving cow comfort. It is reported that Mid-Atlantic states exhibit strong output nearing spring flush levels. February milk production was higher than last year with current output levels indicating production continues to remain above last year. Dairy Market New reports spot milk is still being offered as much as $11.00 below class. USDA will release the February Livestock Slaughter report tomorrow which contains the number of dairy cattle slaughtered during the month. It should be significantly lower than January due to fewer days in the month. It likely will be higher than a year ago due to the vast difference in the milk price outlook.
AVERAGE CLASS III PRICES
| 3 Month: | $18.69 |
| 6 Month: | $18.80 |
| 9 Month: | $19.04 |
| 12 Month: | $19.04 |
CHEESE
The greater strength of blocks compared to the weakness of barrels resulted in an increase in the Class III price calculation, but not by very much due to the weighted average being higher for barrels compared to blocks. The ability of blocks to shrug off the initial lower price today to close 3 cents higher received the attention of traders resulting in strong buying interest in nearby Class III contracts. Cheese manufacturers in the Midwest report cheese supplies are balanced too tight with some indicating they are running behind on filling orders.
BUTTER
It is reported that cream supplies are tightening in the Eastern region. Increased demand for cream is coming from ice cream manufacturers as they ramp up production. However, churning remains active with plants running on full schedules. Retail and food service demand is mostly steady.
OUTSIDE MARKETS SUMMARY
May corn gained 3.50 cents closing at $6.3350. May soybeans fell 18.50 cents ending at $14.4850 with May soybean meal down $9.00 closing at $451.60 per ton. May wheat fell 19.75 cents ending at $6.6350. April live cattle declined $0.12 closing at $162.30. May crude oil gained $1.23 per barrel. The Dow fell 530 points closing at 32,030 while the Nasdaq declined 190 points ending at 11,670.
