Class III milk futures have rebounded significantly over the past week as higher cheese prices have triggered strong trader buying interest. The June contract moved back to the highest level since February 20. The May contract is about half priced and will not move quite as much as the impact of underlying cash prices has less and less impact each day. Milk production continues to increase, with more milk available for processing. Milk processors may not be interested in building inventory at the plant level but may move supply to the spot market as quickly as possible. This may limit the upside price potential, but hopefully, futures will be able to maintain the gains of the past two weeks. USDA will release the March Dairy Products report on Tuesday, providing the level of dairy product production during the month. This will indicate the level of demand we may have seen when comparing it to inventory.
AVERAGE CLASS III PRICES:| 3 Month: | $18.49 |
| 6 Month: | $18.56 |
| 9 Month: | $18.45 |
| 12 Month: | $18.33 |
The block cheese price has increased for five consecutive days. The last time the block price increased for 10 days before the rally stopped. It may be difficult for the price to follow the same pattern this time. The buyers seem to be watching each other, and when buying becomes more aggressive, it pulls more buyers in from the sidelines. Sellers hold back to see how aggressive the buyers will be.
BUTTER:The butter price moved to the top end of the trading range. It may be difficult to move above the range as there is sufficient supply for demand. Churns are running on full schedules to process the abundant supply of available cream. Food service demand continues to run below a year ago.
OUTSIDE MARKETS SUMMARY:July corn closed down 14.75 cents per bushel at $4.5425, July soybeans closed down 12.50 cents at $10.4550 and July soybean meal closed down $1.40 per ton at $295.50. July Chicago wheat closed down 11.75 cents at $5.3125. June live cattle closed up $2.55 at $213.65. June crude oil is down $1.11 per barrel at $57.18. The Dow Jones Industrial Average is down 99 points at 41,219, with the NASDAQ down 133 points at 17,844.
