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.
