MILK:
New lows in Class III futures are concerning. If the June price comes to fruition, it will be the lowest Class III price since May 2020 when COVID sent the market plummeting. Now, there is no dramatic event or unexpected influence impacting the market. It is a matter of supply and demand in a market that has changed because of the current financial environment and world environment. Buyers of cheese and not interested in purchasing aggressively at this time of year and are not aggressive due to the desire to minimize inventory rather than pay for storage any earlier than necessary. Milk supply is sufficient and remains higher than last year with spot milk remaining significantly below class. Wednesday is the last trading day for May futures and options with the Federal Order prices announced Thursday. They are delayed one day due to the holiday on Monday.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.01 |
| 6 Month: | $17.01 |
| 9 Month: | $17.51 |
| 12 Month: | $17.65 |
CHEESE:
Block cheese price has fallen to the lowest level it has been since May 11, 2020. At that time, price was on the rebound after reaching a low of $1.00 in mid-April due to the impact of COVID. There is no indication of a bottom for prices at the present time. Cheese used as ingredients for pizza and other foods is substantially lower in price than a year ago, but that is not being passed on to the consumer as prices for these foods continue to remain high or in some cases are increasing. End users are using this extra income to pay for higher wages and to increase profitability. Demand has not increased significantly but has been rather steady.
BUTTER:
Watching the butter market is about like watching paint dry. Price continues to remain rather stable moving within a narrow price range. Buyers have been able to purchase supply for immediate demand as well as upcoming demand without having to chase the market. Production is keeping up with demand, leaving the market well supplied.
OUTSIDE MARKETS SUMMARY:
July corn closed down 10.00 cents per bushel at $5.9400, July soybeans closed down 40.75 cents at $12.9650 and July soybean meal closed down $9.60 per ton at $392.60. July Chicago wheat closed down 25.00 cents at $5.9100. August live cattle closed up $2.00 at $167.18. July crude oil is down 3.00 per barrel at $69.67. The Dow Jones Industrial Average is down 51 points at 33,043 with the NASDAQ is up 42 points at 13,017.
