MILK
Class III milk futures cannot find support with April, May and June contracts setting new contract lows. The stronger cheese prices have not provided support to the market as traders are not convinced cheese prices will continue to increase.
Cheese buyers have not been aggressive, even though the news of avian flu has been floating around in the news media. Both a bullish and bearish argument can be made for the market depending on the influence it could have on milk production, consumers and their perception of the safety of milk. Pasteurization will kill the virus, rendering the milk completely safe. However, even with that, consumers will draw their own conclusions based on both accurate and inaccurate information.
This did not have an impact on the market today because Class IV futures were significantly higher. The spread between Class III and Class IV milk futures continues to widen and may remain that way for the rest of the year. USDA will release the March Federal Order class prices on Wednesday.
AVERAGE CLASS III PRICES
| 3 Month: | $15.91 |
| 6 Month: | $16.49 |
| 9 Month: | $17.07 |
| 12 Month: | $17.28 |
CHEESE
Cheese prices will need to see further consistent strength before traders become more friendly to the market. Most manufacturers are running on nearly full schedules and have spot milk available to them at class or below. This indicates the milk supply has not yet tightened to any great extent. American cheese inventory did not build in February but total cheese inventory increased. Buyers of cheese are comfortable with the current supply.
BUTTER
Butter price broke above the previous highs, moving to the highest level since Nov. 7, 2023. Demand is better and manufacturers and buyers are not concerned about building an inventory cushion. Cream supplies may tighten into the summer and building inventory is a hedge against the potential of a tightening market. It is unlikely butter price will decline very much which may keep buyers a bit more aggressive in supporting the market.
OUTSIDE MARKETS SUMMARY
May corn closed down 9 cents per bushel at $4.2650, May soybeans closed down 11.75 cents at $11.7400 and May soybean meal closed down $5.10 per ton at $328.30. May Chicago wheat closed down 11.75 cents at $5.4525. June live cattle closed up $1.05 at $176.38. May crude oil is up $1.44 per barrel at $85.15. The Dow Jones Industrial Average is down 397 points at 39,170 with the NASDAQ down 156 points at 16,240.
