GENERAL OVERVIEW:
Class III futures were higher despite a slight decline in the block cheese price and the steady dry whey price. Class IV futures found solid support from the jump in the butter price and a slight increase in nonfat dry milk. Class IV futures might find further strength as it follows butter.
MILK:
The volatility will continue as traders will react quickly to underlying cash movement as they want to scalp the market for a profit, and increased volatility will increase the odds for that to happen. The volatility will allow greater opportunities for hedgers to establish price protection. Mik production and components have been steady to stronger over the past week as the weather has improved cow comfort. The Central region reports that Class III demand has been steady to lighter recently, with a little more milk being available on the spot market. Spot milk is $1.00 to $4.00 under class, indicating the supply is plentiful. Overall fundamentals remain much the same as they had been for a few months and are not expected to change anytime soon.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.08 |
| 6 Month: | $16.77 |
| 9 Month: | $17.17 |
| 12 Month: | $17.25 |
CHEESE:
Block cheese has not been able to find support and has declined back to the lowest level since Feb. 2. Many times, the movement and direction of butter impact the direction of cheese. Hopefully, this will take place soon to at least provide another price bump and hopefully keep it from trending lower.
BUTTER:
The jump in the butter turned Class IV futures higher, allowing the contracts to regain some of the recent losses. There is strong potential for spot butter to increase on Friday due to a large number of unfilled bids that remained at the close of spot trading. The price is still relatively low, and buyers are interested in increasing ownership to avoid the possibility of higher prices as the year progresses.
OUTSIDE MARKETS SUMMARY:
March corn closed up 3.75 cents per bushel at $4.3125, March soybeans closed up 13.25 cents at $11.3725, and March soybean meal closed up $4.90 per ton at $307.90. March Chicago wheat closed up 15.25 cents at $5.5250. April live cattle closed down $0.33 at $240.65. March crude oil is down $1.74 per barrel at $62.89. The Dow Jones Industrial Average is down 669 points at 49,452, with the NASDAQ down 469 points at 22,597.
