MILK
Class III milk futures have shown two days of higher prices corresponding with the gain in cheese prices. Futures have not rebounded to any great extent, but higher prices are always a welcome sight. The February contract has closed at the highest level it has been since December 15, 2023. But given the current low price, it will need to find further support to turn the trend higher and make a real difference on the milk check. There remains concern over the upside price potential of milk futures in the near term as fundamentals do not suggest much strength. It is the time of year during which demand is generally slower and prices are under pressure. That was not the case in 2022 as milk prices moved to record highs in the first half of the year. Fundamentals were different at that time with perception providing a large amount of support under the market. That is not the case this year as milk supply is readily available and end users are not concerned over supply. It will be up to the market to prove itself before it will move higher. Demand will need to improve, and supply will need to tighten.
AVERAGE CLASS III PRICES
| 3 Month: | $15.91 |
| 6 Month: | $16.79 |
| 9 Month: | $17.32 |
| 12 Month: | $17.58 |
CHEESE
It is ironic that February Class III futures are at the highest level since December 15 and block cheese price is at the highest level since December 15. Generally, the correlation is not that exact. Barrels are at the highest level since December 27. Prices are making some progress, but further strength will need to be seen before traders may become more friendly to the market. Certain cheese varieties have seen demand slow since the holidays. However, cheddar cheese demand is reportedly holding well.
BUTTER
It was positive to see a rebound of price today after it seemed as if price was destined to retest the previous low again. This may still take place, but for now, buyers need to purchase supply keeping some support under the market. Butter futures have virtually no price premium throughout the entire year. Usually, futures will carry a 5-7 cents premium to cash.
OUTSIDE MARKETS SUMMARY
March corn closed up 4.25 cents per bushel at $4.5925, March soybeans closed up 3.00 cents at $12.4850 and March soybean meal closed down $.90 per ton at $367.60. March Chicago wheat closed up 13.75 cents at $6.1000. February live cattle closed up $0.83 at $170.78. February crude oil is up $1.47 per barrel at $72.24. The Dow Jones Industrial Average is down 158 points at 37,525 with the NASDAQ is up 14 points at 14,858.
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