MILK
It has not been a volatile week with milk futures prices declining until today. The increase was more the result of profit-taking ahead of the weekend and not from fundamentals. The weakness of cheese prices should have put more pressure on Class III futures, but they had been beaten up all week. The continued weakness is very concerning as milk production remains sufficient for demand even though milk production is below a year ago.
USDA estimates milk production this year to reach 227.3 billion pounds in its World Agricultural Supply and Demand report released today. This is a reduction of 900 million pounds from a month ago. If it comes to fruition, it would be just 900 million pounds above the level of production in 2023.
USDA left beginning stocks on a fat basis unchanged at 13.8 billion pounds. Marketings were reduced 900 million pounds to a total of 226.3 billion pounds. Exports on a fat basis were reduced 600 million pounds to a total of 11.1 billion pounds. Exports on a skim-solids basis were reduced by 900 million pounds to a total of 50 billion pounds.
The average Class III price increased $0.05 from the February estimate to $17.15 for this year. It is surprising it reduced the estimate for the Class IV milk price to $20.10, down $0.10 from the previous estimate. The all-milk price was raised $0.30 to an average of $21.25 None of these estimates are anything to get excited about as prices are not much higher than last year.
AVERAGE CLASS III PRICES
| 3 Month: | $16.38 |
| 6 Month: | $17.03 |
| 9 Month: | $17.46 |
| 12 Month: | $17.59 |
CHEESE
For the week, blocks declined 9 cents with 18 loads traded. Barrels fell 16.25 cents with 13 loads traded. Dry whey declined 1.50 cents with no loads traded. This shows that Class III milk futures fell. Buyers did not step up to the plate but let sellers offer cheese to them. Block cheese price has moved to the lowest level it has been since Jan. 19.
At some point, prices will be low enough to attract more aggressive buying as the market looks ahead to later demand. Barrels are down to the lowest price since Jan. 26. USDA raised the cheese price this year to $1.71 per pound, up 2 cents from its previous estimate. Dry whey was reduced by 3 cents to an average of 45 cents per pound.
BUTTER
For the week, butter increased 4.50 cents with 13 loads traded. Grade A nonfat dry milk decreased 2.75 cents with seven loads traded. The butter price this year was raised 3 cents to an average of 42.80 per pound. The nonfat dry milk price was reduced 2.50 cents to an average of 41.21 per pound.
OUTSIDE MARKETS SUMMARY
May corn closed up 1.75 cents per bushel at $4.3975, May soybeans closed up 17.75 cents at $11.84 and May soybean meal closed up $7 per ton at $341.40. May Chicago wheat closed up 9.25 cents at $5.3775. April live cattle closed down $1.13 at $187.60. April crude oil is down $1.08 per barrel at $77.85. The Dow Jones Industrial Average is down 69 points at 38,723 with the NASDAQ down 188 points at 16,085.
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