MILK:
Class III milk futures fell as liquidation continued, with Class IV futures falling due to the drop in the spot butter price. The weather has been good in much of the nation, which has kept milk production strong. The spring flush period is finished in general, with milk production holding. Milk output is higher due to increased cow numbers and output per cow. The trend has been for more cows to be held rather than to cull heavily due to high replacement prices and tight numbers. More milk is moving to manufacturing as schools close for the summer. This is not expected to increase the supply of manufactured products to any great degree as demand improves seasonally during the second half of the year. The USDA will release the April Agricultural Prices report on Friday.
AVERAGE CLASS III PRICES:
| 3 Month: | $19.11 |
| 6 Month: | $19.25 |
| 9 Month: | $19.09 |
| 12 Month: | $18.87 |
CHEESE:
Cheese prices held well, with the dry whey price higher, but traders were intent on selling futures. There was concern that the potential for further upside price potential has diminished. Traders focused on the weakness of blocks. There are some reports that the cheese inventory in some areas has tightened. Inventory has increased each month this year, but stocks have not exceeded the previous year. If demand improves, this may result in tighter supplies during the second half of the year.
BUTTER:
Butter production remains strong as there is a sufficient cream supply for demand. Retail demand is improving, which has limited inventory growth in April. The result was that stocks in April were 7% below a year ago. Ice cream production is increasing, requiring more cream for manufacturing. This will reduce the amount available for churning.
OUTSIDE MARKETS SUMMARY:
July corn closed down 4.00 cents per bushel at $4.4700, July soybeans closed up 3.25 cents at $10.5175 and July soybean meal closed up $2.70 per ton at $296.40. July Chicago wheat closed up 3.75 cents at $5.3400. August live cattle closed up $1.90 at $210.08. July crude oil is down $0.90 per barrel at $60.94. The Dow Jones Industrial Average is up 117 points at 42,216, with the NASDAQ up 75 points at 19,176.
