Friday Closing Dairy Market Update - New Contract Highs in Class III Milk Futures

MILK

Substantial strength was seen in Class III futures at the end of the week. This was surprising as underlying cheese prices remained unchanged. Some of the strength might have been due to traders wanting to close out some of their positions at the end of the month. Some of the strength might have been the perception of higher prices over time. Class III futures were strong ahead of spot trading and further strength after trading. The July through October contracts moved above $20.00. Class IV futures saw limited trading activity and limited price gain.

The April Agricultural Prices report showed the average corn price at $4.39, an increase of 3 cents per bushel from March. This compares to $6.70 per bushel in April 2023. The premium/supreme hay price was $260.00 per ton, down $11.00 per ton from March and down from $315.00 per ton a year ago. The All-milk price was $20.50 per cwt, down $0.20 per cwt from March and down $0.10 per cwt from April 2023. These prices are used in calculating the income over feed for the Dairy Margin Coverage program. The soybean meal price has not yet been released and may not be released until Monday by the FSA. The alfalfa hay price average was $195.00 per ton, unchanged from March and down $93.00 per ton from a year ago. The soybean price was $11.80, unchanged from March and down $3.10 per bushel from April 2023. The average price for milk cows was $2,120 per head compared to $1,720 a year ago.

AVERAGE CLASS III PRICES

3 Month:	$19.47
6 Month:	$19.89
9 Month:	$19.65
12 Month:	$19.42

CHEESE

For the week, blocks declined 6 cents with 14 loads traded. The barrel price decreased 4 cents with eight loads traded. The dry whey price increased by 1.50 cents with 11 loads traded. Cheese prices declined but the July Class III contract moved to the highest close in the past two weeks. August and later contracts closed at new contract highs.

BUTTER

For the week, butter price declined by 3.25 cents with nine loads traded. The Grade A nonfat dry milk price decreased by 0.75 cent with nine loads traded. The weakness early in the week was short-lived as buyers wanted to take advantage of the low price. However, there were few loads purchased at the lower price. Price may regain the loss and continue the trend higher as demand slowly increases.

OUTSIDE MARKETS SUMMARY

July corn closed down 2.50 cents per bushel at $4.4625, July soybeans closed down 4.75 cents at $12.0500 and July soybean meal closed up $1.10 per ton at $364.70. July Chicago wheat closed down 2.50 cents at $6.7850. August live cattle closed down $1.33 at $178.45. July crude oil is down $0.76 per barrel at $77.15. The Dow Jones Industrial Average is up 575 points at 38,686 with the NASDAQ down 2 points at 16,735.

Friday Midday Dairy Market Summary - Butter Extends Gains

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	6 Lower
SOYBEAN MEAL:	$0.50 Lower
LIVE CATTLE:	$0.85 Lower
DOW JONES:	210 Points Higher
NASDAQ:	196 Points Lower
CRUDE OIL:	$0.02 Lower

MIDDAY MARKET UPDATE:

Both block and barrel cheese remained unchanged at $1.81 and $1.94 respectively. Two unfilled bids remained for blocks and one uncovered offer for barrels remained at the close. The dry whey price increased a penny closing at 41.50 cents with no loads traded. Class III futures are 2 cents lower to 42 cents higher with September showing the greatest gain. Butter jumped 6 cents closing at $3.09 with no loads traded. There were two unfilled bids and one uncovered offer remaining at the close. Grade A nonfat dry milk price gained 0.50 cent closing at $1.1675 with six loads traded. Class IV futures have not yet traded and a bit surprising given the gains over the past two days. Butter futures are 0.70 to 7.50 higher with the June contract posting the limit gain. Dry whey futures are 0.07 cent lower to 1.30 cents higher.

USDA will release the April Agricultural Prices report this afternoon providing the average prices for agricultural commodities for the month. These prices will be used to calculate income over feed for the Dairy Margin Coverage program.

null

Friday Morning Dairy Market Update - Milk Futures Find Some Stability

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	1 to 2 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	8 to 10 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	3 to 5 Higher

MILK:

Milk futures found stability on Thursday, but aggressive buying did not materialize. Traders need to see further evidence of buying interest in the cash markets. Trading activity may be mixed ahead of spot trading today. With sufficient supply for demand and the potential for stronger-than-expected milk production, buyers may not be as aggressive with their purchases. Demand is expected to increase seasonally, which should keep buyers of the physical commodity active, but not aggressive, in the near term. USDA will release the April Agricultural Prices report this afternoon, providing prices used to calculate the income over feed price for the Dairy Margin Coverage program. The soybean meal price is not on the report and will be released later by the FSA.

CHEESE:

Block cheese price remained steady on Thursday but does not indicate it has found support. The block/barrel spread remains inverted, indicating barrel cheese is in better demand and has tighter supply than blocks. Cheese plants indicate demand is improving, which may at least provide price support.

BUTTER:

The butter price was pushed higher by one buyer needing to purchase a load. Once that load was purchased, no other buyers were in the market. It will be interesting to see if sellers will take advantage of the higher price or if other buyers will step up today to purchase ahead of further price increases.

null

Thursday Closing Dairy Market Update - Class III Milk Futures Mixed

MILK

Class III milk futures held even though barrel cheese showed some weakness. Traders were focused on blocks holding steady and the dry whey price increasing. The recent declines may bring buyers back into the market more aggressively at lower prices. This would indicate a bottom in prices which could generate greater buying interest in Class III milk futures. Later futures contracts have been holding in a wide sideways range even though nearby futures have fallen substantially. Class IV futures only showed trade in the July contract with only three contacts traded. Such light volume is not often seen even though Class IV futures do not show the same interest as Class III futures. Surprisingly, there was no more activity due to the rebound of the butter price.

Another case of bird flu in a worker on a Michigan dairy farm was discovered today. This is the third case of a human catching the virus since it has been discovered in dairy cattle. This should not have much impact on the market but will increase the concern over further spread in humans. USDA will release the April Agricultural Prices report on Friday providing the prices used in calculating income over feed for the Dairy Margin Coverage program. The only price not on the report is soybean meal which is released by the FSA usually the following day.

AVERAGE CLASS III PRICES

3 Month:	$19.26
6 Month:	$19.56
9 Month:	$19.37
12 Month:	$19.17

CHEESE

According to the USDA's Dairy Market News, cheese manufacturers indicate curd demand is noticeably stronger than last year. Other varieties of cheese are showing demand improvement. At the same time, milk supply is readily available with increasing milk receipts at the plant level due to schools closing for the summer. Most cheese plants indicated running at full capacity and not looking to the spot market for extra milk.

BUTTER

Cream remains available at levels similar to the past few weeks. However, supply is anticipated to decline over the next few weeks, and summer weather impacts components and ice cream manufacturing increases. The recent decline of butter may have been limited as today's bounce indicates the price reached levels that will attract buyer interest.

OUTSIDE MARKETS SUMMARY

July corn closed down 6.50 cents per bushel at $4.4875, July soybeans closed down 4.25 cents at $12.0975 and July soybean meal closed down $5.50 per ton at $363.60. July Chicago wheat closed down 11.75 cents at $6.8100. August live cattle closed down $0.43 at $179.78. July crude oil is down $1.36 per barrel at $77.87. The Dow Jones Industrial Average is down 330 points at 38,111 with the NASDAQ down 184 points at 16,737.

Thursday Midday Dairy Market Summary - Butter Price Rebounds

OUTSIDE MARKETS SUMMARY:

CORN:	6 Lower
SOYBEANS:	3 Lower
SOYBEAN MEAL:	$4.10 Lower
LIVE CATTLE:	$0.37 Lower
DOW JONES:	264 Points Lower
NASDAQ:	64 Points Lower
CRUDE OIL:	$1.35 Lower

MIDDAY MARKET UPDATE:

The block cheese price remained steady at $1.81 after initially trading 0.25 cent lower. There were nine loads traded. The barrel cheese price declined 2 cents closing at $1.94 with three loads traded. There were two unfiled bids for blocks and one uncovered offer for barrels. The dry whey price increased a penny closing at 40.50 cents with one load traded. Class III futures are 5 cents lower to 10 cents higher. Butter price regained 5.50 cents of its recent losses closing at $3.03 with one load traded. The buyer kept moving the bid higher until a load was purchased. There were two uncovered offers remaining at the close with no unfilled bids. Butter price may settle into a sideways pattern for a time. Grade A nonfat dry milk price slipped 0.25 cent closing at $1.1625 with one load traded. Class IV futures have only traded in the July contract with the price up a penny. Butter futures are 0.72 to 4.32 cents higher. Dry whey futures are 0.22 to 0.62 cent higher.

Fluid Milk and Cream - Western U.S. Report 22

In California, milk production continues to trend seasonally weaker. Stakeholders convey open processing capacity in the Central Valley is tight due to unplanned downtime at area plants. Stakeholders also indicate the northern portion of the state is more able to take in spot milk load volumes compared to other parts of the state. All Class demands are steady. According to the California Department of Water Resources, as of May 27, 2024, the state has gotten 23.24 inches of precipitation for the current 2023-24 Water Year, up 0.92 inches from the historical mean. According to the California Department of Water Resources, as of May 29, 2024, the estimated total statewide reservoir storage was 33.80 million acre feet, which is 118 percent of the historical average. 

Milk production is also trending seasonally weaker in Arizona. However, manufacturers indicate milk volumes are meeting processing needs. Class I demand is lighter as some school districts have started summer breaks. Class II, III, and IV demands are steady. 

Handlers in New Mexico note week-to-week farm level milk output varies from steady to weaker. Class I demand is lighter as educational institutions in the state cycle through starting up session breaks. All other Class demands are steady. 

In the Pacific Northwest, milk production is steady. Manufacturers indicate milk volumes are comfortable compared to processing needs and capacities. All Class demands are unchanged. 

In the mountain states of Idaho and Utah farm level milk output is mostly reported as steady or somewhat weaker. Some stakeholders are anticipating milk and cream to be tight over the summer this year. Farm level milk output in Colorado is mostly reported as steady. Class I demand is lighter in the mountain states overall as many educational institutions have or soon will start seasonal breaks. All other Class manufacturing demands are steady. 

Stakeholders indicate cream volumes remain generally available throughout the region. Cream demand is mixed, partly due to the holiday weekend. Cream multiples moved slightly lower on the bottom end of both ranges. Stakeholders note condensed skim milk demand varies from strong to steady, and loads are readily available.

null

Thursday Morning Dairy Market Update - Traders Uncertain Over Cash Strength

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 8 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	Mixed
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	6 to 8 Lower

MILK:

Milk futures have moved mostly in line with the underlying cash. The bearishness of the milk production report seems to have run its course for milk futures. However, the impact on underlying cash prices is uncertain as the weakness on Wednesday leaves traders cautious. There is sufficient milk available for bottling and manufacturing leaving little concern over milk supply for now. Milk production has leveled which may indicate spring flush has reached its peak. It may remain at this level with more milk moving to manufacturing as schools close for the summer. Class III futures show minor weakness in overnight trade with activity ahead of cash expected to be mixed.

CHEESE:

Cheese could see further weakness during spot trading today as buyers may hold back and continue to purchase on price weakness. The concern over supply tightness has been alleviated, leaving cheese buyers less aggressive. This may change if demand begins to increase seasonally and prices find support.

BUTTER:

The bounce of butter from the low on Wednesday during spot trading may indicate the price has declined sufficiently to generate increased buying interest. The price is not expected to see much more weakness as retail demand is reported to remain strong. Buyers may step up to increase ownership of supply for later in the year.

Wednesday Closing Dairy Market Update - Milk Futures Move in Line with Cash

MILK

Class III milk futures were mostly higher even though cheese prices declined. The losses yesterday had already factored in the weakness of prices. Some short covering might have taken place due to the recent decline. Futures could rebound due to extreme volatility, leaving traders cautious. Trading volume was strong in Class III futures with June showing 1,460 contracts with July over 1,000 contracts traded. Class IV futures showed unusually strong volume. There is a possibility milk production may remain stronger than anticipated for the year. USDA had increased its expectations of the World Agricultural Supply and Demand report rained estimated milk production by one billion pounds from their previous estimate. This may be accurate if the current trend continues. Milk production has been flat over the past week as spring flush seems to have run its course. Component values remain strong as hot weather has not impacted cow comfort to any great extent.

AVERAGE CLASS III PRICES

3 Month:	$19.28
6 Month:	$19.52
9 Month:	$19.32
12 Month:	$19.14

CHEESE

Block cheese price moved to the lowest level since May 3 as cheese buyers stepped back as the price had moved too high and fast. It is uncertain where cheese prices should be relative to supply and demand. Buyers remain willing to purchase cheese but at lower prices. The cheese inventory is not larger than a year ago but is sufficient to meet demand. Demand needs to improve seasonally as cheese production trends higher as more milk moves to manufacturing.

BUTTER

Spot butter showed further weakness but did find support at a lower price during spot trading today. That does not mean price has found support, but buying interest increased at the lower price. The price could be low enough to increase buyer interest as they increased ownership for expected demand later in the year. The current inventory is higher than a year ago.

OUTSIDE MARKETS SUMMARY

July corn closed down 7.25 cents per bushel at $4.5525, July soybeans closed down 15.50 cents at $12.14 and July soybean meal closed down $7.50 per ton at $369.10. July Chicago wheat closed down 7.50 cents at $6.9275. August live cattle closed down $1.63 at $180.20. July crude oil is down $.57 per barrel at $79.26. The Dow Jones Industrial Average is down 411 points at 38,442 with the NASDAQ down 99 points at 16,921.

Wednesday Midday Dairy Market Summary - Spot Prices Decline in All Categories

OUTSIDE MARKETS SUMMARY:

CORN:	7 Lower
SOYBEANS:	14 Lower
SOYBEAN MEAL:	$6.20 Lower
LIVE CATTLE:	$1.35 Lower
DOW JONES:	371 Points Lower
NASDAQ:	72 Points Lower
CRUDE OIL:	$0.60 Lower

MIDDAY MARKET UPDATE:

Block cheese price fell 5.25 cents, closing at $1.81 with five loads traded. Barrel cheese price declined 2 cents, closing at $1.96 with five loads traded. This widens the block/barrel spread to 15 cents. There was an unfilled bid and an uncovered offer for a load of blocks while barrels had three uncovered offers remaining at the close. This is not putting pressure on Class III futures due to contracts showing substantial pressure on Tuesday, which had the weakness today already factored in. Dry whey slipped 0.25 cents, closing at 39.50 cents with six loads traded. Class III futures are 3 cents lower to 32 cents higher with July showing the greatest gain and June the only loss. Butter price declined 2.75 cents, closing at $2.9750 with five loads traded. The price initially went down to $2.95 before buying interest took it off the lows. There was quite a bit of movement during the trading session. Butter price is down to the lowest level since April 30. Grade A nonfat dry milk price declined by 0.50 cent, closing at $1.1650 with two loads traded. Class IV futures are steady to 27 cents lower. Butter futures are 0.50 to 3.52 cents lower. Dry whey futures are 0.25 lower to 0.27 cent higher.

Wednesday Morning Dairy Market Update - Butter Futures Fall in Overnight Trade

OPENING CALLS:

Class III Milk Futures:	Steady to 4 Lower
Class IV Milk Futures:	10 to 20 Lower
Butter Futures:	2 to 3 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Lower
Soybean Futures:	2 to 4 Lower
Soybean Meal Futures:	Steady to $1 Lower
Wheat Futures:	3 to 4 Lower

MILK:

Milk futures took a beating on Tuesday with Class III pressure by the minor weakness of blocks and dry whey while Class IV futures fell due to the weakness of nonfat dry milk and the extreme weakness of butter. That continued overnight with usual trading activity and further pressure on Class IV contracts. It is unusual to see trading activity in Class IV futures overnight, but the volume was good with futures showing double-digit losses. If the current trend seen in the milk production report continues, milk production may be stronger than expected and move milk output higher than a year ago. This could leave milk prices higher than a year ago, but not as good as was hoped.

CHEESE:

Traders are uncertain about spot cheese prices today. The slight weakness on Tuesday triggered a negative reaction in milk futures. Barrels held but may show weakness as buyers on the spot market may not feel the need to remain aggressive at the current price. Cheese output is increasing as more milk flows to the vat.

BUTTER:

It is unusual to see much volume in overnight trade, but last night was the exception to the norm. Traders who could not liquidate due to futures being down the limit on Tuesday wanted to get out of the market in case spot butter declines further. Overnight futures were 1.75 to 4.35 cents lower with further pressure expected. Buyers of butter may hold back to see how aggressive sellers will be due to the large decline on Tuesday.

Tuesday Closing Dairy Market Update - Butter Futures Close Limit Down

MILK

Milk futures took a beating across the board today as traders focused on the weakness of block cheese in Class III trading and the fall of the butter price in Class IV trading. Neither of which were positive to the market. Since last week Monday, June Class III futures reached a high of $21.82 and reached a low today of $19.44. The trading action today does not indicate the market has found support. Class IV futures retraced nearly three weeks of gains today in moderate trading activity.

The FDA approved Elanco's Bovaer as a feed additive to reduce methane emissions. Gregg Doud, the President and CEO of the National Milk Producers Federation stated, "Consumers around the world are demanding lower-carbon foods. Innovations such as Bovaer will help U.S. dairy farmers remain globally competitive and maintain their role as leaders in more sustainable dairy production. We thank FDA for its recognition of and support for these efforts." Elanco reports that feeding one tablespoon of Bovaer per lactating dairy cow per day can reduce methane emissions by about 30% or about 1.2 metric tons of carbon dioxide equivalent emissions annually. It is unclear as to the cost of feeding this additive and whether farms could have any monetary incentive to add this to the rations.

AVERAGE CLASS III PRICES

3 Month:	$19.26
6 Month:	$19.44
9 Month:	$19.25
12 Month:	$19.09

CHEESE

Cheese prices seem to be coasting but showing some signs of weakness. Barrels are in a tighter position holding the price at a premium to blocks. Cheese production is increasing as more schools close for the summer resulting in heavier milk volumes available for manufacturing. Increasing cheese production is not expected to be bearish for the market as inventory remains in line with a year ago according to the cold storage report released last week.

BUTTER

The large decline in butter today was a surprise to the market. Futures fell to the limit of 7.50 cents for the June through December contracts. After that reaction took place, there was no further selling activity that could take place. The last time the price declined of this magnitude was November 7, 2023. Further trading may show further losses as liquidation continues.

OUTSIDE MARKETS SUMMARY

July corn closed down 2.25 cents per bushel at $4.6250, July soybeans closed down 18.50 cents at $12.2950 and July soybean meal closed down $9.90 per ton at $376.60. July Chicago wheat closed up 3.00 cents at $7.0025. August live cattle closed up $0.70 at $181.83. July crude oil is up $2.53 per barrel at $80.25. The Dow Jones Industrial Average is down 217 points at 38,853 with the NASDAQ up 99 points at 17,020.

Tuesday Midday Dairy Market Summary - Butter Falls

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	17 Lower
SOYBEAN MEAL:	$8.30 Lower
LIVE CATTLE:	$0.77 Higher
DOW JONES:	37 Points Higher
NASDAQ:	18 Points Lower
CRUDE OIL:	$2.04 Higher

MIDDAY MARKET UPDATE:

Block cheese price slipped by 0.75 cent, closing at $1.8625 with no loads traded. Barrel cheese price remained unchanged at $1.98 with no loads traded. Only sellers showed up during spot trading with offers for two loads of barrels and one load of blocks. Dry whey price slipped 0.25 cent, closing at 39.75 cents with four loads traded. Class III futures show losses of 3 to 48 cents with July showing the greatest decline. The big move was in butter with a decline of 12 cents with the price closing at $3.0025 with three loads traded. Trading activity did not place until the price was nearly at the low. There were four uncovered offers remaining at the close of spot trading. Grade A nonfat dry milk price declined 0.50 cent, closing at $1.17 with no loads traded. Class IV futures are under pressure with contracts 55 to 74 cents lower. These are the largest price declines in Class IV futures we have seen in quite a while.

Tuesday Morning Dairy Market Update - Milk Futures Show Further Pressure

OPENING CALLS:

Class III Milk Futures:	5 to 10 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	2 to 4 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	8 to 12 Higher

MILK:

Milk futures were lower for the week, which may keep traders cautious early this week. The block/barrels spread may narrow further as buyers and sellers settle down to reality rather than perception. The milk production report showed production in April below a year ago but better than expected for the month. The same may hold for May as the weather has been good and milk prices showed much promise. Schools have closed and will close over the next week with more milk available for manufacturing. This is not expected to pressure prices but could limit upside potential near term.

CHEESE:

The April Cold Storage report was not bearish on the market, but may not support prices. The lack of inventory growth for cheese compared to a year was expected. This indicates supply and demand have been balanced and the current spot prices justified. Cheese production will increase and it will be up to demand whether prices will increase as the year progresses.

BUTTER:

The butter increase on the Cold Storage report was expected and not burdensome. Churning was active with plants utilizing the higher cream supply to build inventory and provide a cushion of supply ahead of the summer when the cream supply would tighten. Retail butter demand is improving with mixed demand in the food service industry.

Friday Closing Dairy Market Update - April Butter Stocks Increase 9%

MILK

Class III futures closed the week lower with substantial losses in the June and July contracts compared to the close of last week. The June Class III contract had a price swing from the high to the low of $1.76. In contrast, Class IV futures showed strong gains from last week's close. The June Class IV contract price range from the high to the low was $0.28. The June Class IV contract closed $1.37 higher than the June Class III contract. Cheese and dry whey spot prices increased this week while butter and nonfat dry milk prices declined.

Class III milk futures were impacted significantly in response to the milk production report released on Monday. It caused buyers of cheese to step back which affected Class III futures. The report did not negatively affect the Class IV futures as butter buyers did not return from the market. Milk production in April was lower than a year ago but stronger than expected.

AVERAGE CLASS III PRICES

3 Month:	$19.50
6 Month:	$19.66
9 Month:	$19.42
12 Month:	$19.21

CHEESE

For the week, blocks declined 7.50 cents with 37 loads traded. Barrels declined 14.50 cents with 19 loads traded. Dry whey declined 1.50 cents with 12 loads traded. The April Cold Storage report showed that American cheese stocks were unchanged from a year ago totaling 839.2 million pounds. Inventory increased by 10.6% from March. Swiss cheese inventory increased by 230,000 pounds totaling 22.1 million pounds, up 2% from April 2023. Total cheese stocks decreased by 5.2 million pounds, totaling 598.4 million pounds. Total cheese inventory reached 1.460 billion pounds, up 5.6 million pounds from March, but down 1% from a year ago.

BUTTER

For the week, butter increased by 5.50 cents with five loads traded. Grade A nonfat dry milk price gained one cent with 24 loads traded. Butter inventory in April jumped 44.0 million pounds totaling 361.3 million pounds, up 9% above a year ago. This may limit the upward price potential in the near term.

OUTSIDE MARKETS SUMMARY

July corn closed up 0.75 cent per bushel at $4.6475, July soybeans closed up 8.75 cents at $12.4800 and July soybean meal closed up $9.80 per ton at $386.50. July Chicago wheat closed down 0.75 cent at $6.9725. August live cattle closed up $0.05 at $181.13. July crude oil is up $0.85 per barrel at $77.72. The Dow Jones Industrial Average is up 4 points at 39,070 with the NASDAQ up 185 points at 16,921.

Friday Midday Dairy Market Summary - Cheese Prices Were Unable to Hold the Highs

OUTSIDE MARKETS SUMMARY:

CORN:	2 Higher
SOYBEANS:	9 Higher
SOYBEAN MEAL:	$8.90 Higher
LIVE CATTLE:	$0.12 Lower
DOW JONES:	88 Points Higher
NASDAQ:	187 Points Higher
CRUDE OIL:	$1.02 Higher

MIDDAY MARKET UPDATE:

The block cheese price gained 0.50 cent with seven loads traded. The price initially increased to $1.8850 before selling pressure took the price off the high. Barrel price declined 1.75 cents, closing at $1.98 with seven loads traded. Price initially increased by 0.25 cent, before slipping lower. The dry whey price increased by 0.50 cent, closing at 40 cents with no loads traded. Traders focused on the dry whey and block strength with overall buying interest. Class III futures are 3 cents lower to 19 cents higher with the December contract showing the only weakness. Butter remained steady at $3.1225 with no loads traded. Grade A nonfat dry milk price declined 1.25 cents, closing at $1.1750 with six loads traded. the only contract traded in Class IV futures was the August contract with the price down 11 cents. Butter futures are steady to 4.15 cents lower. Dry whey futures are 0.20 to 0.65 cent lower. USDA will release the April Cold Storage report Friday afternoon. The market will be close on Monday in observance of Memorial Day.

Friday Morning Dairy Market Update - April Cold Storage Report Today

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 top 8 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	Mixed
Soybean Meal Futures:	$1 to $2 Higher
Wheat Futures:	5 to 7 Lower

MILK:

Milk futures will be choppy ahead of spot trading but with an upward bias. There seems to be little reason for cheese prices to fall back even though milk production was better than expected in April. Milk futures will remain volatile but underlying cash may not see much weakness. However, the recent milk production report showed farmers responded to the better price outlook with increased milk production per cow. Now that prices look much better, the same may hold for this month. The April Cold Storage report will be released Friday afternoon, providing inventory information compared to a year ago. It is not expected to have an impact on milk futures that took place after the milk production report.

CHEESE:

The block/barrel spread is expected to narrow with both sides moving together rather than one side moving to meet the other. Demand is good but prices may have moved higher than they needed to at this time of year. Buyers have concerns over supply as the year progresses. Inventory is not expected to have increased much in April.

BUTTER:

Butter price continues to trend higher as the market is supported by demand and not perception. Buying has been taking place as current demand needs to be filled and upcoming demand is anticipated to improve. Exports have been slow, but international prices and demand have been improving. With current demand and prices where they are, imagine what prices could do if export demand improves.

 

Thursday Closing Dairy Market Update - Dairy Cattle Slaughter Declines

MILK

Milk futures were higher for Class III futures, stopping the decline for today. The strength of blocks was more than offset by the weakness of barrels, but that did not have much impact on the market as traders were more focused on blocks. Class IV futures continued the higher trend with new contract highs in all months. It appeared Class III prices might move closer to Class IV as the year progressed, but that may not be the case. Butter may continue to exceed cheese prices as butter is in a stronger fundamental position.

The April Livestock Slaughter report showed dairy cattle slaughter at 38,200 head. This was down 6,400 head from March and down 5,400 head from April 2023. This was the lowest monthly slaughter since December 2023 and the lowest April slaughter since 2022. There is potential for higher milk prices and the replacement heifer supply is tight. This increases the desire for farmers to reduce culling.

AVERAGE CLASS III PRICES

3 Month:	$19.54
6 Month:	$19.66
9 Month:	$19.40
12 Month:	$19.18

CHEESE

Cheese output in the West is strong, keeping plants running on full schedules. More milk will be moving to manufacturing as schools close for the summer. This is not expected to overwhelm the market but may keep sufficient supply available that will limit the upside price potential. Milk components are higher than last year which has improved cheese yields.

BUTTER

The butter price continues to trend higher as demand is steady to stronger. Any price weakness is expected to be short-lived. The extent of the price potential is difficult to predict but gains this early in the year may indicate prices could move near the high of last year or possibly exceed the high. The supply of cream is sufficient, but it is expected to tighten as summer weather heats up and ice cream production increases.

OUTSIDE MARKETS SUMMARY

July corn closed up 2.75 cents per bushel at $4.6400, July soybeans closed down 7.00 cents at $12.3925 and July soybean meal closed down $1.50 per ton at $376.70. July Chicago wheat closed up 5.00 cents at $6.9800. August live cattle closed down $0.60 at $181.08. July crude oil is down $0.66 per barrel at $76.91. The Dow Jones Industrial Average is down 606 points at 39,065 with the NASDAQ down 66 points at 16,736.

Thursday Midday Dairy Market Summary - Cheese Prices Diverge

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	6 Lower
SOYBEAN MEAL:	$1.20 Lower
LIVE CATTLE:	$0.10 Lower
DOW JONES:	467 Points Lower
NASDAQ:	35 Points Higher
CRUDE OIL:	$0.87 Lower

MIDDAY MARKET UPDATE:

The block cheese price gained 2.50 cents, closing at $1.8650 with five loads traded. The barrel cheese price declined by 3.25 cents, closing at $1.9975 with four loads traded. The weakness of barrels more than offset the gain in blocks resulting in the decline of the cash price calculation. The cash trading activity moved the block/barrel spread closer together. The dry whey price remained unchanged at 39.50 cents with no loads traded. Class III futures have been on a roller coaster with overnight weakness finding strength up to spot trading and then being unable to hold the high prices. Class III futures are 7 cents lower to 17 cents higher. Butter price increased a penny closing at $3.1225 with no loads traded. Only one buyer showed up for spot trading and was unable to purchase a load. The Grade A nonfat dry milk price increased by 1.50 cents closing at $1.1875 with four loads traded. Class IV futures are steady to 22 cents higher. Butter futures are 1.25 cents lower to 2.95 cents higher. Dry whey futures are 0.50 to 0.60 cents lower. USDA will release the April Livestock Slaughter report Thursday showing the level of dairy cattle slaughter for the month.

Fluid Milk and Cream - Western U.S. Report 21

Milk production in California is trending weaker. Handlers say May 2024 milk production is down from April 2024 milk production as seasonally anticipated. Handlers say week-to-week decreases in milk production are steadily paced. Some handlers note preliminary records indicate May 2024 milk production as slightly lower than May 2023 milk production. Industry participants convey some unplanned downtime at area plants slowed down milk processing recently, making Central Valley processing capacities tight. Industry participants note spot milk load sales at up to $0.50 under flat blend prices. All Class demands are unchanged. 

In Arizona, milk production is trending weaker. No milk volume shortages are reported by processors. All Class demands are steady. 

Farm level milk output in New Mexico is somewhat weaker. Industry participants convey some open processing capacity is available. Class I, II, III, and IV demands are steady. 

In the Pacific Northwest, reported milk production varies from steady to strengthening. Although processors are heavily utilizing milk volumes, some open processing capacity is noted. All Class manufacturing demands are steady. 

In the mountain states of Idaho, Utah, and Colorado farm level milk output ranges from steady to stronger. Stakeholders indicate mixed spot milk load availability. Class III milk demand from cheese manufacturers is stronger. All other Class manufacturing demands are steady. 

Stakeholders indicate cream volumes are comfortable and available for spot buyers. Cream demand is mixed with some plant operators planning downtime during the upcoming holiday weekend. Cream multiples are unchanged this week. Condensed skim milk demand is steady. Condensed skim milk is noted to generally be readily available. 

Thursday Morning Dairy Market Update - Trader Anticipate Further Weakness

OPENING CALLS:

Class III Milk Futures:	5 to 10 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	3 to 5 Higher
Soybean Meal Futures:	Steady to $1 Higher
Wheat Futures:	2 to 3 Lower

MILK:

Class III milk futures continue to fall following the weakness of underlying cash. The argument could be made that the price went too high, too fast as buyers outbid each other trying to purchase cheese before prices increased. This propelled milk futures higher as traders became bullish. There was also concern that milk production would continue to decline due to the impact of the H5N1 virus and increased culling. That idea changed with the release of the April Milk Production report showing production holding better than expected. This resulted in the fear of tight milk production dissipating for the time being. Class IV futures have been supported by pushing to new contract highs in anticipation of the continued strength of butter.

CHEESE:

It is uncertain how much further cheese prices will decline before buyers become more aggressive. There is buying interest but buyers are waiting for lower prices to increase their supply of cheese. The wide spread between blocks and barrels remains a surprise as it does not seem the barrel supply is tighter than blocks.

BUTTER:

Butter demand is steady to stronger, which is reflected in the spot market. It is uncertain which direction the price will move Thursday as no buyers or sellers showed up during spot trading Wednesday. Price is expected to remain supported but may hold sideways for a time.

Wednesday Closing Dairy Market Update - Global Dairy Trade Gains 3.3%

MILK

Class III milk futures did not decline as much as they did on Tuesday, but the selling pressure continued. The further weakness of spot cheese prices kept pressure on the market. Milk production in the Eastern region is reportedly flat compared to last week. This does not necessarily indicate spring flush has run its course but is slowing. It is reported that component values are stronger than usual which improves cheese yields and the availability of cream. Sufficient milk is available for bottling and manufacturing. The June Class I milk price was announced at $20.08, an increase of $1.62 from May and a gain of $2.07 from a year ago.

The Global Dairy Trade auction trade-weighted average increased 3.3% from the previous event. Anhydrous milk fat increased by 3.5% to $7,365 per metric ton or $3.34 per pound. Butter increased 5.1% to $6,931 per metric ton or $3.14 per pound. The cheddar cheese price remained steady at $4,239 per metric ton or $1.92 per pound. The lactose price gained 8.1% to $795 per metric ton or $0.36 per pound. Mozzarella jumped 9.8% to $4,215 per metric ton or $1.91 per pound. Skim milk powder increased by 3.5% to $2,629 per metric ton or 41.19 per pound. Whole milk powder increased 2.9% to $3,408 per metric ton or $1.54 per pound.

AVERAGE CLASS III PRICES

3 Month:	$19.45
6 Month:	$19.47
9 Month:	$19.26
12 Month:	$19.07

CHEESE

It is reported that cheese demand is strong this week heading into the Memorial Day weekend. Hopefully, this demand will remain strong and increase moving forward. Spot milk prices strengthened slightly ranging from $2.00 to $0.50 under class. Component values are stronger than a year earlier keeping cheese yields strong.

BUTTER

Butter took a breather today with no trading activity. Neither buyers nor sellers show up during spot trading today. They may have been waiting for either buyers or sellers to tip their hand before stepping into the market. Price is expected to be supported with only minor retracements, if and when they take place.

OUTSIDE MARKETS SUMMARY

July corn closed up 3.25 cents per bushel at $4.6125, July soybeans closed up 10.00 cents at $12.4625 and July soybean meal closed up $5.90 per ton at $378.20. July Chicago wheat closed down 4.50 cents at $6.9300. August live cattle closed up $1.25 at $181.68. July crude oil is down $1.09 per barrel at $77.57. The Dow Jones Industrial Average is down 202 points at 39,671 with the NASDAQ down 31 points at 16,802.

Wednesday Midday Dairy Market Summary - Cheese Shows Further Weakness

OUTSIDE MARKETS SUMMARY:

CORN:	4 Higher
SOYBEANS:	11 Higher
SOYBEAN MEAL:	$4.50 Higher
LIVE CATTLE:	$1.00 Higher
DOW JONES:	140 Points Lower
NASDAQ:	45 Points Lower
CRUDE OIL:	$0.84 Lower

MIDDAY MARKET UPDATE:

Block cheese price declined 1.50 cents, closing at $1.84 with eight loads traded. The barrel cheese price declined 3 cents, closing at $2.03 with four loads traded. Buyers are interested in purchasing supply but do not need to be aggressive as sellers try to sell ahead of further price declines. The dry whey price declined 0.50 cent, closing at 39.50 cents with nine loads traded. Class III futures are 45 cents lower to 18 cents higher. The butter price remained unchanged at $3.1125 with no loads traded. There was no interest in doing business as buyers and sellers did not show up during the trading period. Grade A nonfat dry milk price slipped 0.25 cents, closing at $1.1725 with 10 loads traded. Class IV futures are steady to 18 cents higher. Butter futures are 2.30 cents lower to 1.35 cents higher. Dry whey futures are 1.00 to 2.90 cents lower.

Wednesday Morning Dairy Market Update - Milk Futures Fall Overnight

OPENING CALLS:

Class III Milk Futures:	20 to 40 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Higher
Soybean Futures:	8 to 11 Higher
Soybean Meal Futures:	$3 to $5 Higher
Wheat Futures:	5 to 7 Higher

MILK:

Class III milk futures have come under substantial pressure over the past two days and it looks to continue Wednesday unless buyers become more aggressive in the spot market. The June contract falling below $20.00 again is incredible as at the end of last week it had a price about $1.50 higher. Traders turned negative after the milk production report showed production holding better than anticipated with production per cow increasing by 9 pounds. Cow numbers are lower but production per cow is making up for some of the losses. Class IV futures showed gains while Class III futures fell widending the price gap again.

CHEESE:

There were unfilled bids for loads of blocks at the close of spot trading Tuesday. However, those buyers may lower those bids Wednesday as they see weakness in the overall market. They may wait to see how aggressive sellers will be. Cheese production is increasing as more milk is being diverted to manufacturing as schools close for the summer.

BUTTER:

Butter is the opposite of cheese with demand steady and showing signs of improving and buyers aggressively looking to increase ownership for demand later in the year. It is uncertain as to how much more aggressive buyers will be but the strength early in the year could result in the record high price of last year being exceeded this year. USDA will release the April Cold Storage report Friday, showing the level of inventory compared to the previous year.

Tuesday Midday Dairy Market Summary - Class III Futures Fall the Limit

OUTSIDE MARKETS SUMMARY:

CORN:	4 Lower
SOYBEANS:	13 Lower
SOYBEAN MEAL:	$2.50 Lower
LIVE CATTLE:	$1.50 Higher
DOW JONES:	7 Points Higher
NASDAQ:	2 Points Lower
CRUDE OIL:	$0.65 Lower

MIDDAY MARKET UPDATE:

Block cheese price fell 6.50 cents, closing at $1.8550 with 12 loads traded. The barrel cheese price fell 5 cents, closing at $2.06 with three loads traded. Buyers stepped back but not completely away from the market. They did not see the need to be aggressive with purchases due to the bearish implications of the April Milk Production report. There were six unfilled bids for blocks at lower prices with an uncovered offer for a load of barrels. The dry whey price was down 1.50 cents, closing at 40 cents with three loads traded. This weakness sent Class III futures lower, adding to the weakness before spot trading. All contracts are 1 to 75 cents lower. The June and July contracts are down the limit with August not far behind with a loss of 56 cents. Nearby futures have eliminated the gains realized over the past week. Butter price increased 2 cents, closing at $3.1125 with one load traded. Grade A nonfat dry milk price increased 1.50 cents with one load traded. Class IV futures are 11 cents lower to 13 cents higher. Butter futures are 1.07 to 5.97 cents higher. Dry whey futures are 0.52 to 0.62 cent lower.

Tuesday Morning Dairy Market Update - Selling Pressure Expected

OPENING CALLS:

Class III Milk Futures:	10 to 15 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 4 Lower
Soybean Futures:	6 to 9 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	Mixed

MILK:

Milk futures are expected to be under pressure ahead of spot trading Tuesday as traders react to the bearish implications of the April Milk Production report. Milk production was better than expected with milk output in the U.S. only down 0.4% from the previous year. Milk per cow was 9 pounds above April 2023. This gives the impression milk production may exceed last year's level if the weather remains moderate and culling slows. The report might impact the aggressiveness of buyers in the spot market as they may not be as concerned over supply.

CHEESE:

The weakness of cheese Monday may cause buyers to step back to see if sellers will be more aggressive as they want to take advantage of the higher prices. The downside price potential may be limited based on demand and the inventory on the Cold Storage report for April. USDA will release the April Cold Storage report Friday.

BUTTER:

Price continued higher Monday and may not be impacted by the milk production report. Buyers have been focused on increasing ownership for a potentially tighter cream supply and increased butter demand as the year progresses. The price trend has been higher and looks to continue for the foreseeable future.

Monday Closing Dairy Market Update - April Milk Production Declines 0.4%

MILK

The April Milk Production report had an impact on Class III milk futures. After the milk production report was released this afternoon, selling pressure increased with nearby contracts making new lows for the day. Milk production in the top 24 states declined 0.2% totaling 18.3 billion pounds. March milk production was revised higher resulting in a decline of 0.5% rather than the reported decline of 0.9%. Milk production has been stronger than expected even with cow numbers declining. Production per cow in the top 24 states increased by 8 pounds averaging 2,064 pounds per cow. Cow numbers declined by 7,000 head from March. Milk production in the country declined by 0.4% from April 2023. Milk production per cow increased by 9 pounds from a year earlier totaling 2,049 pounds. Cow numbers were 8,000 head less than in March. Milk production is stronger than anticipated though cow numbers have declined. This resulted in a bit more negativity in futures to end the day. This may not be completely reflected in the closing prices as the report was released near the time the CME settled the market for the day. However, the weakness may be reflected in overnight trade. There were 12 of the top 24 states which showed production declines. New Mexico showed the greatest loss with a decline of 17.3%. This was followed by a decline of 7.2% in Georgia and down 6.3% in Oregon. The rest of the losses were less than 4.0%. The state with the greatest gain was South Dakota with a gain of 12.3%. Florida showed a gain of 11.4%. Iowa gained 3.6% with the rest of the gains being less than 3.0%.

AVERAGE CLASS III PRICES

3 Month:	$20.04
6 Month:	$19.91
9 Month:	$19.59
12 Month:	$19.33

CHEESE

The weakness of cheese today does not indicate further losses may develop. However, buyers could hold back due to the slight weakness and milk production holding better than anticipated. Sellers of cheese may now want to sell more aggressively, taking advantage of the higher prices that developed. The concern over tighter milk supply may move to the back burner.

BUTTER

Butter price extended the gain pushing price above the previous high two weeks ago. The trend remains higher with demand showing signs of improving. The current supply is not tight, but the perception is that supply will tighten as the year progresses. This perception may continue to support the market unless demand remains stagnant.

OUTSIDE MARKETS SUMMARY

July corn closed up 8.00 cents per bushel at $4.6050, July soybeans closed up 20.00 cents at $12.4800 and July soybean meal closed up $5.30 per ton at $374.10. July Chicago wheat closed up 37.50 cents at $6.8875. June live cattle closed up $0.43 at $181.48. July crude oil is down $0.28 per barrel at $79.30. The Dow Jones Industrial Average is down 197 points at 39,807 with the NASDAQ up 109 points at 16,795.

April Milk Production in the United States down 0.4 Percent

April Milk Production down 0.2 Percent        

Milk production in the 24 major States during April totaled 18.3 billion pounds, down 0.2 percent from April 2023. March revised production, at 18.9 billion pounds, was down 0.5 percent from March 2023. The March revision represented an increase of 78 million pounds or 0.4 percent from last month's preliminary production estimate.  

Production per cow in the 24 major States averaged 2,064 pounds for April, 8 pounds above April 2023.   

The number of milk cows on farms in the 24 major States was 8.89 million head, 55,000 head less than April 2023, and 6,000 head less than March 2024.   

April Milk Production in the United States down 0.4 Percent  

Milk production in the United States during April totaled 19.1 billion pounds, down 0.4 percent from April 2023.  

Production per cow in the United States averaged 2,049 pounds for April, 9 pounds above April 2023.  

The number of milk cows on farms in the United States was 9.34 million head, 74,000 head less than April 2023, and 8,000 head less than March 2024.