Thursday Closing Dairy Market Update - Markets May Have Found Support

MILK:

Class III gains were limited after the dry whey price declined during spot trading, but the gains in cheese eventually overcame the weakness to strengthen prices. Only the June Class III contract remains below $18.00. The strength of the past three days does not indicate a bottom has been established, but it does make one feel better about the potential for somewhat higher prices. Whether they will hold or not remains to be seen. Milk production will move higher as the spring flush unfolds. Even though California has been significantly impacted by bird flu, milk production is improving from its low level. Anything is better than what it had been. Some processors indicate that milk receipts are moving closer to what they were a year ago. This is not bearish to the market but is positive to the outlook for farmers as bird flu might be running its course. Bottling demand is variable as universities and schools have their spring breaks over the next few weeks. This leaves more spot milk available for purchase at mostly discounted prices.

AVERAGE CLASS III PRICES:

3 Month:	$18.28
6 Month:	$18.22
9 Month:	$18.35
12 Month:	$18.27

CHEESE:

Cheese demand is termed as steady. There are some reports of demand beginning to improve. The supply of cheese is sufficient for demand. The hope is that demand will improve to keep up with increasing milk production. Cheese inventory remains below a year ago and is expected to remain below a year ago for much of the year. This will support prices if demand improves as the year progresses.

BUTTER:

The butter price may have reached a bottom as the heavy cream supplies are absorbed and utilized. The heavy supply of cream may remain for a while but will eventually decline. This will not make the market bullish but should provide support. Sellers continue to offer butter to the spot market, allowing buyers to increase ownership. This may limit the upside price potential later as buyers will not need to compete for supplies.

OUTSIDE MARKETS SUMMARY:

May corn closed up 4.50 cents per bushel at $4.6525, May soybeans closed up 10.25 cents at $10.1075 and May soybean meal closed up $6.90 per ton at $307.10. May Chicago wheat closed up 8.50 cents at $5.6250. April live cattle closed up $0.65 at $202.05. April crude oil is down $0.94 per barrel at $66.74. The Dow Jones Industrial Average is down 537 points at 40,814 with the NASDAQ down 345 points at 17,303.