MILK:
Traders seemed to throw caution to the wind to begin the week, even though the end of last week closed with caution. Early buying was quickly reversed once underlying cash cheese prices showed weakness. Milk prices look much more promising than earlier this year. The better outlook will keep milk production strong as farmers will continue to push milk production on the idea that prices will only get better as the year progresses. Cows will remain in the herds as stalls will be kept full. Those who want to purchase replacements will purchase them on the idea that strengthening milk prices during spring flush may mean higher prices later in the year as demand improves. Beef cattle prices remain high and are expected to remain that way for some time to come. This will keep beef-on-dairy a popular choice for breeding a significant percentage of the herd, leaving heifer supplies tight and prices high.
AVERAGE CLASS III PRICES:
| 3 Month: | $18.82 |
| 6 Month: | $18.96 |
| 9 Month: | $18.80 |
| 12 Month: | $18.62 |
CHEESE:
The weakness in the spot cheese today may result in further weakness on Tuesday, as buyers may have reached their threshold. Sellers may want to sell as much as possible before prices decline, adding to the weakness. However, the market is not expected to fall apart as buyers will step in more aggressively on price weakness.
BUTTER:
Retail butter demand is improving, but whether it will be enough to cause the price to break out of the range anytime soon is anyone's guess. However, exports are expected to remain strong as the U.S. price is very competitive in the world market. Butter price would be lower than it is if it were not for strong exports.
OUTSIDE MARKETS SUMMARY:
July corn closed up 4.00 cents per bushel at $4.4750, July soybeans closed up .75 cent at $10.5075 and July soybean meal closed down $.80 per ton at $291.10. July Chicago wheat closed up 4.00 cents at $5.2900. June live cattle closed up $0.75 at $212.98. July crude oil is up $0.16 per barrel at $62.13. The Dow Jones Industrial Average is up 137 points at 42,792, with the NASDAQ up 4 points at 19,215.
