MILK:
Class III milk futures posted a nice close after the second day of stronger cheese prices. The gain of futures was not in correlation to the gain of underlying cash due to traders remaining cautious over the extent of the price strength. Recently, there has only been a maximum of 2 days of underlying strength before sellers stepped back into the market more aggressively. Traders will watch the cash market closely for any change from the recent pattern. The current milk supply remains plentiful for both bottling and manufacturing. Spot milk still remains from $4.00 to $11.00 below class. Milk production is slowing relative to the first 3 months of this year but remains above a year ago. Manufacturers and end users are not concerned over supply at the present time. Class IV futures closed mostly steady on Friday with a few contracts closing mixed. The weakness of butter was offset by the increase of nonfat dry milk price. There is 81% of the nation's corn planted and 66% of the soybean planted running well ahead of last year's pace.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.29 |
| 6 Month: | $17.40 |
| 9 Month: | $17.77 |
| 12 Month: | $17.84 |
CHEESE:
It would be nice to see cheese buyers remain aggressive for a time but current supply most likely will keep upside potential limited. Buyers are not concerned about supply tightness and will purchase as product is needed. The goal seems to be to limit the amount of cheese in inventory to limit the cost of storing extra cheese until later in the year. The desire is to move it as quickly as possible once it is produced.
BUTTER:
Butter made an attempt to move above and remain above the sideways trading range it has been in so far this year, but it could not find enough buying interest to push it higher. Supply is plentiful with cream supply sufficient for ongoing production. Some plants are selling extra cream rather than churn it due to the available quantity of supply.
OUTSIDE MARKETS SUMMARY:
July corn closed up 16.50 cents per bushel at $5.7100, July soybeans closed up 34.00 cents at $13.4125 and July soybean meal closed up $3.10 per ton at $412.20. July Chicago wheat closed up 1.25 cents at $6.0625. August live cattle closed down $0.70 at $163.60. July crude oil is up $0.36 per barrel at $72.05. The Dow Jones Industrial Average is down 140 points at 33,287 with the NASDAQ is up 63 points at 12,721.
