MILK
There have been some issues with cows in Texas, but it is unclear what it is. Some thought it could be a result of wildfires that raged recently in the Texas Panhandle. It is unclear what impact that may have on overall milk production but likely not much as it seems confined to certain areas.
Whether this could have triggered some buying interest in the market today is uncertain. More likely, traders might have been more aggressive buyers to get ahead of the February Milk Production report to be released Wednesday. The January report resulted in a few days of upward price movement before prices fell back. The report Wednesday may show lower milk production and reduced cow numbers which would again support the market.
Traders wanted to get in earlier to take advantage of the potential increase in prices before the report. If this is the case, futures may again be higher on Wednesday. Underlying cash provided no price direction, leaving the market moving on perception. I estimate milk production to be down 1% after the adjustment is made for Leap Day. I estimate the cow number to be down 10,000 head from January.
AVERAGE CLASS III PRICES
| 3 Month: | $16.48 |
| 6 Month: | $17.29 |
| 9 Month: | $17.78 |
| 12 Month: | $17.87 |
CHEESE
Cheese prices remained unchanged with neither buyers nor sellers aggressive or even showing up to do business. No sellers showed up to offer any loads of blocks and no buyers showed up to purchase barrels. The market may be balanced for the time being. Buyers may not be very aggressive in the near term as supply is readily available for demand. Milk receipts at the plant level are improving but inventory is not building.
BUTTER
Butter price held steady with loads traded in the spot market. However, the decline of nonfat dry milk will keep Class IV futures in check. Class IV futures are substantially higher than Class III futures and are expected to remain that way the entire year due to butter prices remaining supported. If international demand improves, butter price could move significantly higher as the year progresses.
OUTSIDE MARKETS SUMMARY
May corn closed up 3.50 cents per bushel at $4.3950, May soybeans closed down 2.25 cents at $11.8550 and May soybean meal closed up $2.00 per ton at $333.90. May Chicago wheat closed up 9.75 cents at $5.5250. April live cattle closed down $0.53 at $188.05. May crude oil is up $0.57 per barrel at $82.73. The Dow Jones Industrial Average is up 320 points at 39,111 with the NASDAQ up 63 points at 16,167.
