MILK
Both block and barrel cheese are nearing the $2.00 price level. This has provided substantial price support to Class III milk futures. The movement higher has been unexpected. There have been other times when cheese prices moved up this quickly. Historically, those strong moves were short-lived as the strength was due to perception and emotion. There may be more supporting the strength this time, but there is a possibility that a void could be developing in the market. The hope is that the anticipation of the market becomes a reality with milk prices able to hold and increase further as the year progresses.
June Class III milk futures were moved limit up since spot trading took place and barrels increased by 6 cents. Other contracts were higher but did not see the same reaction as traders are bullish but cautious. There is concern the market has moved too high, too fast. Class IV futures showed double-digit gains in numerous contracts.
AVERAGE CLASS III PRICES
| 3 Month: | $20.85 |
| 6 Month: | $19.85 |
| 9 Month: | $19.48 |
| 12 Month: | $19.16 |
CHEESE
The strength of barrels may indicate buyers may be more aggressive. Buyers are attempting to purchase cheese ahead of any further price increase. However, that continues to spur further increases as they become more aggressive. The barrel price is at the highest level since November 2022.
BUTTER
The butter price is expected to find support at the $3.00 level. Price weakness will be viewed as a buying opportunity. The strength is seen much earlier than in the past two years, increasing buyer's concerns. Price could find a plateau near this level, but the price may trend higher as the summer progresses.
OUTSIDE MARKETS SUMMARY
July corn closed up 2.75 cents per bushel at $4.7250, July soybeans closed up .50 cent at $12.1950 and July soybean meal closed down $5.40 per ton at $366.50. July Chicago wheat closed up 23.50 cents at $6.8700. June live cattle closed down $0.58 at $175.58. June crude oil is up $0.86 per barrel at $79.12. The Dow Jones Industrial Average is down 81 points at 39,432 with the NASDAQ up/down 47 points at 16,388.
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