MILK:
The bearishness of the milk production report was taken in stride, with traders focusing on underlying cash and the potential for increasing demand. Class III futures were mostly higher. Class IV futures were slightly lower in light trading activity. Milk production in most of the country is increasing as the spring flush continues. Spot milk prices hold a discount to class as most plants have sufficient supply and do not need to purchase extra. Bottling demand remains steady. The milk supply for manufacturing is increasing as more milk comes from farms. The March Livestock Slaughter report will be released on Thursday. There are mixed estimates as to the level of slaughter during the month. Weekly slaughter has shown an increase in dairy cattle slaughter, but that may not have been the case in March. The milk production report showed cow numbers up 8,000 head from a year ago. Heifer prices are high and not readily available to fill empty stalls. It will take some time for that purchased heifer to pay for itself. It may be cost-effective to hold a lower producer and be ahead financially.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.79 |
| 6 Month: | $18.01 |
| 9 Month: | $18.11 |
| 12 Month: | $18.08 |
CHEESE:
Dairy Market News reports that demand for cheese is improving in the Central Region of the country. However, it remains below a year ago and will need to improve significantly before prices trend higher. Spot milk is reflecting the spring flush, with prices reported as low as $7.00 below class. The March Cold Storage report will be released on Thursday and is expected to show an increase in inventory from February, but below a year ago.
BUTTER:
The butter price is expected to remain sideways as cream supplies are abundant and production exceeds demand. March inventory is expected to be significantly above a year ago. Stocks are expected to have increased substantially from February. Retail demand is steady as lower prices are attractive to consumers and international buyers.
OUTSIDE MARKETS SUMMARY:
May corn closed down 3.75 cents per bushel at $4.7200, May soybeans closed up 5.25 cents at $10.4025 and July soybean meal closed down $.90 per ton at $298.60. July Chicago wheat closed down 6.75 cents at $5.4350. June live cattle closed up $1.83 at $208.10. June crude oil is down $1.39 per barrel at $62.28. The Dow Jones Industrial Average is up 420 points at 39,607, with the NASDAQ up 408 points at 16,708.
