MILK:
Class III milk futures moved lower again Monday with contracts moving back down near the lows. Pressure returned during spot cheese and dry whey trading, leaving traders selling the market again. It will be difficult to get traders excited over any strength of underlying cash due to any price increases being short-lived. The current fundamentals do not suggest a turn in the market. Some stability of prices might be found, but a steady trend higher may remain elusive for a while. Increasing milk production keeps sufficient milk available to the market for both bottling and manufacturing. This leaves little concern over tight supply. Spot milk prices continue to range from $4.00 to as much as $10.00 below class, where it has been since the end of last year. A year ago, spot milk prices were $1.00 to $2.50 under class. Ongoing labor shortages continue to hinder some plants from being able to utilize lower priced spot milk as they are already at the capacity of their current workforce. Plants have more room but are unable to increase output.
Strong milk production is expected to continue for a period. Tuesday is the last day to trade April futures and options.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.42 |
| 6 Month: | $17.93 |
| 9 Month: | $18.35 |
| 12 Month: | $18.42 |
CHEESE:
Cheese prices cannot find a bottom. Sellers continue to bring loads to the market to keep cheese from building up. Sellers have not had any desire to hold back, waiting for buyers to become more aggressive. Buyers will continue to purchase as it is offered to them, filling orders and slowing increasing ownership of supplies to use as a hedge against possible higher prices later in the year. Production is keeping up with demand.
BUTTER:
Spot price remains in a range with butter futures indicating stronger prices as the year progresses. However, the gains are limited as traders are uncertain over just how much strength there may be under the current market fundamentals. Cream supply remains sufficient for production, but supply is expected to tighten as weather warms and ice cream production increases.
OUTSIDE MARKETS SUMMARY:
July corn closed down .50 cent per bushel at $5.845, July soybeans closed up 8.25 cents at $14.275 and July soybean meal closed up $1.20 per ton at $4.336. July Chicago wheat closed down 15.50 cents at $6.1825. June live cattle closed down $0.60 at $164.88. June crude oil is down 1.08 per barrel at $75.70. The Dow declined 46 points, ending at 34,052 while the Nasdaq declined 14 points, closing at 12,213.
