MILK:
The uncertainty of demand from domestic and international markets has moved some traders to the sidelines. Cheese prices have now increased further than had been anticipated and are making traders increasingly nervous. The fundamentals do not suggest continued strength, but the level of price potential is difficult to predict. The weather has been improving and fields have been drying in many places. Fieldwork will commence and crops will be planted, assuring feed for the coming year. The better weather is improving cow comfort, resulting in an increase in milk production. Class III futures showed strong gains in the May, June and July contracts. Trading activity was confined to those contracts with traders uncertain of prices later in the year. The uncertainty has moved some traders to the sidelines. Class IV futures only showed one load traded in the December contract. Futures showed minor gains as they were marked to the market based on bids and offers.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.40 |
| 6 Month: | $17.74 |
| 9 Month: | $17.84 |
| 12 Month: | $17.81 |
CHEESE:
Blocks have now moved to the highest price since Feb. 28. Barrels moved to the highest price since Jan. 30. This does not indicate the supply and demand balance has changed or supplies have tightened. Cheese output remains strong and is increasing, but buyers may be increasing ownership for later demand. They would rather purchase now than chase the market higher if demand improves.
BUTTER:
The price remains in a narrow range. Increasing inventory and strong production schedules will keep supply readily available. Buyers have not had difficulty finding butter as manufacturers continue to offer loads to the spot market. The supply of cream will not be as abundant once the weather becomes hotter, and butterfat levels decrease.
OUTSIDE MARKETS SUMMARY:
May corn closed down 5.25 cents per bushel at $4.8500, May soybeans closed down 1.00 cent at $10.4175 and May soybean meal closed down $2.50 per ton at $297.10. May Chicago wheat closed down 8.25 cents at $5.4750. June live cattle closed up $2.28 at $199.08. May crude oil is up $0.03 per barrel at $61.53. The Dow Jones Industrial Average is up 312 points at 40,525 with the NASDAQ up 107 points at 16,831
