MILK:
It was a bit of a surprise to see Class III milk futures closing mixed after yet another day of weakness for cheese prices. Cheese continues to be offered to the market with sellers trying to move supply. As long as sellers keep bringing it to the spot market and remain aggressive in moving it, buyers will hold back and continue to purchase on the way down. Milk prices will follow as the near-term outlook does not look very good. Milk production continues to improve as time progresses. Milk production in 2022 was 1% above 2021 at 226.5 billion pounds. The current projection is for production this year to reach 228.7 billion pounds. The average milk output per cow was 24,087 pounds and was 138 pounds higher than 2021. Cash receipts from the marketing of milk last year totaled $57.3 billion, an increase of 36.9% above 2021. This stands to reason due to milk prices reaching record levels. The average milk price for the year was $25.39. This year looks to be much different as the All-milk price so far has averaged $21.93. USDA will announce the April Federal Order class prices tomorrow. The May contract has now moved to the front month.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.12 |
| 6 Month: | $18.04 |
| 9 Month: | $18.35 |
| 12 Month: | $18.40 |
CHEESE:
Sellers of cheese continue to offer product to the market at ever-lower prices. There seems to be a desire to limit the amount of inventory held by manufacturers as it cost more money to store product. With the current price outlook, it may not be beneficial for plants to carry inventory as they may lose money on storage costs. Current milk production is higher than last year and increasing seasonally leaving buyers complacent over ongoing supply.
BUTTER:
Price bounced back up to the top end of the trading range. It will be interesting to see if price will finally be able to break above the range or if sellers will be more aggressive tomorrow following the pattern so far this year. The May futures contract is now the front-month and is trading right in line with the spot price.
OUTSIDE MARKETS SUMMARY:
July corn closed down 4.50 cents per bushel at $5.80, July soybeans closed down 16.75 cents at $14.1075 and July soybean meal closed down $5.70 per ton at $4.279. July Chicago wheat closed down 9.00 cents at $6.0925. June live cattle closed down $1.98 at $162.90. June crude oil is down 4.08 per barrel at $71.58. The Dow fell 367 points closing at 33,685 while the Nasdaq lost 132 points closing at 12,081.
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