MILK
Class III milk futures showed a strong move over the past two days. First, it was based on the perception of a tightening milk supply due to reduced cow numbers in the milk production report earlier this week and then on increasing cheese prices. It is too early to tell whether the market will continue to trend higher but lower milk output from reduced cow numbers and milk production per cow may provide the catalyst for longer-term price strength.
Of the top 23 states, there were 16 states showing production declines compared to the previous year. It has been a long time since there were that many states in any one month showing a decline.
The largest milk production decline took place in New Mexico, down 16%. The largest increase took place in South Dakota with a gain of 10.8%. California was down just 0.1% while Wisconsin showed an increase of 0.9%. Milk production in 2023 was slightly below 2022 and the first year-over-year decrease since 2009.
AVERAGE CLASS III PRICES
| 3 Month: | $17.10 |
| 6 Month: | $17.88 |
| 9 Month: | $18.19 |
| 12 Month: | $18.25 |
CHEESE
The January Cold Storage report has been delayed until 2 p.m CST on Monday due to technical issues. The industry will have to wait over the weekend andMonday before seeing what inventories of cheese and butter did during January. Traders will be interested in seeing whether cheese inventory increased.
For the week, blocks increased by 7 cents with 19 loads traded. Barrels increased by 0.75 cents with six loads traded. Dry whey gained just 0.25 cent with one load traded.
BUTTER
Butter had a nice move this week posting a gain of 10 cents with 24 loads traded. The price moved above the previous high on Jan. 30 on Thursday and made another increase today. This moves the price back to the highest level since Nov. 8, 2023. Butter seems to have solid support under it and may continue to trend higher. Nonfat dry milk price increased 3 cents this week with 15 loads traded. It is not very often we see this volume in spot nonfat dry milk trade over a week.
OUTSIDE MARKETS SUMMARY
March corn closed down 6.25 cents per bushel at $3.9975, March soybeans closed down 14.75 cents at $11.3300 and May soybean meal closed down $3.40 per ton at $328.00. May Chicago wheat closed down 10.25 cents at $5.6900. April live cattle closed up $1.35 at $187.90. April crude oil is down $2.04 per barrel at $76.57. The Dow Jones Industrial Average is up 62 points at 39,132 while the NASDAQ was down 45 points at 15,997.
