MILK:
Milk futures eliminated the entire gains that were realized last week. Traders began showing some optimism last week with the gains in underlying cash. The decline in spot prices again with a decline after a brief increase will make it more difficult for traders to become bullish when spot prices increase. Underlying cash prices will need to prove that they will trend higher before traders will buy back into the market. Milk production is trending higher as spring weather improves cow comfort. There has recently been some adverse weather in areas of the country, but dairy farmers are doing an excellent job of taking care of their cows and increasing production per cow. The extent of the increase in milk production is unclear. Cow numbers are higher than a year ago, but that may not indicate milk output will exceed a year ago.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.68 |
| 6 Month: | $17.73 |
| 9 Month: | $18.00 |
| 12 Month: | $17.97 |
CHEESE:
Cheese supplies are not overwhelming but are sufficient. Buyers are not concerned over supply despite inventory being below a year ago. The supply and demand balance is such that prices are at the level they need to be. Lower prices are needed to increase demand. The problem is that demand is below a year ago with the result being lower prices.
BUTTER:
One wonders whether the butter price will fall back to the low level it had been not too long ago. Sellers continue to offer supplies to the market to keep plant inventories from building. Buyers purchase as needed and increase ownership on price weakness. This may limit the upside price potential over time as buyers will have sufficient supply purchased to meet later demand.
OUTSIDE MARKETS SUMMARY:
May corn closed up 2.50 cents per bushel at $4.6100, May soybeans closed down 0.50 cent at $10.1550 and May soybean meal closed down $1.60 per ton at $304.30. May Chicago wheat closed up 11.50 cents at $5.6850. April live cattle closed up $1.85 at $205.03. April crude oil is up $0.30 per barrel at $67.48. The Dow Jones Industrial Average is up 353 points at 41,842, with the NASDAQ up 55 points at 17,809.
