MILK:
Milk futures showed limited volatility but ended mostly higher. Spot prices were unchanged to higher as the early bearishness gave way to more aggressive buying interest. Even though it seems the market is supportive, traders were cautious over the upside potential in the near term. Milk production in areas of the country has remained steady recently. The areas that have seen some cold weather along with snow and ice have slowed the upward momentum of milk production. This may be temporary has slowed the seasonal increase for now.
The Global Dairy Trade auction took place on Tuesday with the trade-weighted average down 1.4% from the previous event. There were 30,156 metric tons sold at an average price of $4,029 per metric ton. Anhydrous milk fat decreased by 1.6% to $7.169 per metric ton or $3.25 per pound. Butter increased by 2.6% to $6,815 per metric ton or $3.09 per pound. Buttermilk powder increased by 0.9% to $3,116 per metric ton or $1.41 per pound. Cheddar cheese increased 1.0% to $4,728 per metric ton or $2.14 per pound. Lactose decreased 2.4% to $900 per metric ton or $0.41 per pound. Skim milk powder decreased 2.2% to $2,682 per metric ton or $1.22 per pound. Whole milk powder decreased by 2.1% to $3,804 per metric ton or $1.73 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $20.66 |
| 6 Month: | $20.10 |
| 9 Month: | $19.76 |
| 12 Month: | $19.52 |
CHEESE:
Cheese production remains strong as the milk supply is available for manufacturing. There is an interesting scenario developing as some forward contracts are not being established due to buyers and sellers waiting for the development of structural pricing changes to the federal orders. Much of the purchase is being done for near-term orders. The availability of spot milk has changed substantially with prices reported at class to $1.00 over class. This is a much tighter market than a year ago.
BUTTER:
The supply of cream available to the churns is substantial. Cream multiples fell significantly over the holidays and currently remain at low prices. Prices will increase over time as the backlog of cream is processed. The butter price is trending higher but will increase by leaps and bounds.
OUTSIDE MARKETS SUMMARY:
March corn closed down 4.00 cents per bushel at $4.5400, March soybeans closed down 2.75 cents at $9.9450 and March soybean meal closed down $2.70 per ton at $300.80. March Chicago wheat closed down 6.25 cents at $5.3625. February live cattle closed down $1.88 at $193.70. February crude oil is down $0.93 per barrel at $73.32. The Dow Jones Industrial Average is up 107 points at 42,635 with the NASDAQ down 11 points at 19,479.
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