MILK
Three days of strength in underlying cheese price failed to gain upside momentum in Class III futures. The weakness on Wednesday put further pressure on the market. The April, May and June contracts made new lows again. Milk prices do not look very good as underlying cash prices do not provide support to the market. This pattern may continue through the spring as milk production continues to increase.
Milk is sufficient for demand with spot milk prices ranging from $3 to as much as $5 below class. If there is milk available at a discount, it indicates a sufficient milk supply for demand. USDA announced the February Federal Order class prices. The Class II price was $21.12, up $0.59 from January and $1.60 higher than February 2023. The Class III price was $16.34, up $0.26 from the previous month, but down $1.76 from last year. The Class IV price was $20.09, up $0.24 from January and $1.71 higher than February 2023.
AVERAGE CLASS III PRICES
| 3 Month: | $15.79 |
| 6 Month: | $16.75 |
| 9 Month: | $17.21 |
| 12 Month: | $17.38 |
CHEESE
Cheese plants continue to see increasing milk receipts as spring flush continues. Some are running on full production schedules. Those who need extra milk can find it on the spot market at a discount.
At least spot milk prices are not as low as last year due to milk production running below a year ago. Manufacturers continue to offer cheese to the spot market as they do not want to hold much extra inventory than they need as milk remains readily available. Buyers are purchasing without having to chase the market.
BUTTER
Butter price is following a similar trend as the past two years with price trending higher earlier this year. Either this could reach price resistance as consumers reduce purchases or prices could see higher prices than last year. It follows that pattern, which seems to be fueled by buyers that had been holding back, now stepping up to the plate.
OUTSIDE MARKETS SUMMARY
May corn closed up 5.25 cents per bushel at $4.3175, May soybeans closed up 8.25 cents at $11.8225 and May soybean meal closed up $1.70 per ton at $330.00. May Chicago wheat closed up 10.75 cents at $5.5600. June live cattle closed down $0.78 at $175.60. May crude oil is up $0.50 per barrel at $85.65. The Dow Jones Industrial Average is down 43 points at 39,127 with the NASDAQ up/down 37 points at 16,277.
