MILK
It was not a good day for milk futures as Class III contracts took a beating with May falling below $17.00 closing at $16.89. Contracts through the end of the year showed double-digit losses. Traders are bearish with price rallies difficult to materialize and hard to maintain. Lower prices for cheese have not increased buyer interest enough to establish a bottom. Dairy cattle slaughter in March totaled 306,100 head, an increase of 40,100 head from February. This is not too surprising as there were 3 more days to the month and depending on calendar composition, a large increase is possible. The better comparison is to the previous year showing 8,900 more head slaughtered than in March 2022. This is the highest monthly slaughter since I have records going back to 1994. Yet the nation's dairy herd increased 6,000 head from February according to the milk production report.
AVERAGE CLASS III PRICES
| 3 Month: | $17.70 |
| 6 Month: | $18.26 |
| 9 Month: | $18.65 |
| 12 Month: | $18.69 |
CHEESE
Block cheese price falling to the lowest level since November 2021 does not bode well for the market. The fact that no trading was done today in the spot market with no sellers showing up to do any business increases the bearish tone of the market. The cold storage report will be released tomorrow and will show whether inventory has been able to build in comparison to last year. This would explain the pressure on cheese prices that we have seen recently as buyers see sufficient supplies available to the market.
BUTTER
Butter inventory is expected to have increased during the month of March which is keeping supply readily available to the market and inventory building for later demand. Cream supply is sufficient now for demand keeping churns active, but that availability will tighten as summer comes. For now, price is expected to remain in a sideways pattern.
OUTSIDE MARKETS SUMMARY
May corn fell 12 cents closing at $6.5125. May soybeans fell 18.25 cents ending at $14.6525 with May soybean meal down $6.10 per ton closing at $439.50. May wheat fell 18.25 cents closing at $6.4350. June crude oil gained $0.89 closing at $78.76 per barrel. The Dow gained 66 points closing at 33,875 while the Nasdaq declined 35 points closing at 12,037.
