GENERAL OVERVIEW:
Milk futures closed mostly under pressure despite minimal movement in the underlying cash. The World Agricultural Supply and Demand Estimates report was released, showing limited changes in grains and increases in milk and dairy product prices.
MILK:
Class III milk futures were mixed, with contracts lower during the first half of the year and later contracts higher. Class IV futures suffered substantial losses despite mixed butter and nonfat dry milk spot prices. It appears milk futures will remain volatile despite limited movement in the underlying cash. USDA increased its estimate for milk output this year by 200 million pounds, totaling 234.5 billion pounds. If this comes to fruition, production will be 3.0 billion pounds higher than in 2025. The estimate for the average Class III price was raised by $0.30 to $16.65 per cwt. The Class IV estimate was raised to $15.70, up $1.25 from the previous month. The All-milk price was raised to $18.95, up $0.70 from the January report. Beginning stocks on a fat basis were raised by 400 million pounds, totaling 12.8 billion pounds. Exports increased by 500 million pounds, and more than offset the increase in inventory. Beginning stocks on a skim-solid basis were reduced by 200 million pounds, while exports were reduced by 100 million pounds.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.07 |
| 6 Month: | $16.72 |
| 9 Month: | $17.13 |
| 12 Month: | $17.20 |
CHEESE:
The USDA raised its estimated average cheese price to $1.6050, up $0.02 from the January estimate. This would be a decrease of about $0.7850 per pound from last year. The dry whey price was raised to $0.6900 per pound, up $0.02 from the previous estimate. This would be an increase of about 9.50 cents from 2025.
BUTTER:
The USDA increased its estimate for the butter price this year by $0.08 per pound to an average of $1.68. This would be about $0.54 per pound lower than in 2025. The nonfat dry milk price estimate was raised by $0.11 per pound to $1.3150 and would be $0.08 higher than in 2025.
OUTSIDE MARKETS SUMMARY:
March corn closed steady at $4.2875, March soybeans closed up 11.75 cents at $11.2250, and March soybean meal closed up $3.00 per ton at $300.80. March Chicago wheat closed down .50 cent at $5.2825. April live cattle closed down $0.78 at $237.43. March crude oil is down $0.18 per barrel at $64.18. The Dow Jones Industrial Average is up 52 points at 50,188, with the NASDAQ down 136 points at 23,102.
