MILK
Both Class III and Class IV milk futures closed steady to higher on Thursday. Class IV contracts continued the support seen so far this week while Class III finally bounced after the first half of this week's weakness. The trading activity today was just normal business being done by traders and not a reflection of any specific market influence.
The Global Dairy Trade (GDT) took place earlier this week with the trade-weighted average increasing 2.8% from the previous event. This eliminates the loss of the previous event. There were 168 bidders during the event with 18,737 metric tons sold. Anhydrous milk fat increased by 2.3% from the previous event to $6,934 per metric ton or $3.15 per pound. Butter increased 3.1% to $6,592 per metric ton or $2.99 per pound. Buttermilk powder decreased by 0.5% to $2,496 per metric ton or $1.13 per pound. Cheddar cheese increased 4.1% to $4,340 per ton or $1.97 per pound. Lactose decreased by 3.1% to $753 per metric ton or $0.34 per pound. Skim milk powder increased 1.4% to $2,550 per metric ton or $1.16 per pound. Whole milk powder increased 3.4% to $3,246 per metric ton or $1.47 per pound.
AVERAGE CLASS III PRICES
| 3 Month: | $15.97 |
| 6 Month: | $16.87 |
| 9 Month: | $17.29 |
| 12 Month: | $17.44 |
CHEESE
It is noteworthy to see that the cheddar cheese price on the GDT auction is $0.53 per pound above the spot price on the CME. This should make the U.S. competitive in the world market and potentially improve export potential. Both domestic and international demand need to improve to tighten supply and increase prices.
BUTTER
The minor setback in the butter price today did not change the market's sentiment. The market seems supported by buyers interested in purchasing supply to hedge against potential price increases. Buyers seem more willing to purchase and store butter than cheese. One reason is that butter can be frozen and used later without a change in consistency; cheese in storage goes through an aging process. This makes butter a consistent product available for the market.
OUTSIDE MARKETS SUMMARY
May corn closed up 3.50 cents per bushel at $4.3525, May soybeans closed down 2.25 cents at $11.80 and May soybean meal closed up $3.50 per ton at $333.50. May Chicago wheat closed up .25 cent at $5.5625. June live cattle closed up $0.25 at $175.85. May crude oil is up $1.43 per barrel at $86.86. The Dow Jones Industrial Average is down 530 points at 38,597 with the NASDAQ up/down 228 points at 16,049.
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