MILK
Milk futures did not do much as there was no direction from underlying cash. It was one of those rare days during which there was no price movement in all spot trade categories. Traders found no reason to move futures much prior to spot trading and had no reason to move them after spot trading. Market fundamentals have not changed much over the past week leaving traders moving futures relative to underlying cash. The Global Dairy Trade auction last week showed further weakness with the trade weighted average down 4.3%. There were 157 bidders at the event with 32,613 metric tons sold. Anhydrous milk fat declined 0.5% to $4,705 per metric ton or $2.13 per pound. Butter declined 0.7% to $4,680 per metric ton or $2.12 per pound. Buttermilk powder jumped 9.9% to $2.207 per metric ton or $1.00 per pound. Cheddar cheese declined 1.4% to $3,910 per metric ton or $1.77 per pound. Skim milk powder declined 1.4% to $2,454 per metric ton or $1.11 per pound. Whole milk powder fell 8.0% to $2,864 per metric ton or $1.30 per pound. Lactose was not offered during the auction.
AVERAGE CLASS III PRICES
| 3 Month: | $17.86 |
| 6 Month: | $18.12 |
| 9 Month: | $18.18 |
| 12 Month: | $18.23 |
CHEESE
Block cheese price seems to be at a comfortable level for both buyers and sellers. There is uncertainty with barrels as supply is more available potentially limiting the upside. It will be positive for the market to find support and hold or move higher as the year progresses. The concern is that the current cheese prices are significantly above the world price which may hinder exports further than already have been.
BUTTER
Butter exports have slowed over the past few months and the Global Dairy Trade auction shows an indication as to why. The U.S. price is substantially above the world price which will continue to hinder exports. Butter production is slowing which should support price near this level as buyers turn their attention to demand later in the year. Overall, supply and demand are balanced.
OUTSIDE MARKETS SUMMARY
December corn closed up 3.00 cents per bushel at $4.9875, November soybeans closed up 4.00 cents at $13.0600 and December soybean meal closed up $2.40 per ton at $394.00. September Chicago wheat closed down 1.25 cents at $6.5625. October live cattle closed down $0.53 at $180.90. September crude oil is up $0.98 per barrel at $82.92. The Dow Jones Industrial Average is down 159 points at 35,314 with the NASDAQ down 110 points at 13,884.
