GENERAL OVERVIEW:
Milk futures closed significantly higher in response to higher spot prices. Milk production is seasonally strong across much of the country.
MILK:
Milk production is seasonally strong. Some plants in the Eastern region of the country indicate that they are having difficulty finding spot loads of milk, as some of the new facilities that came online during the past year are pulling more of the available milk. Fluid milk demand is strong, with bottlers running on full schedules. Class III milk futures pushed higher in response to the increase in the underlying spot prices. Cheese prices increased with limited trading activity. Butter increased with no loads traded. The spot market has good support for the time being and is improving the outlook for milk prices. May through December Class III contracts are now above $18.00. Class IV March through November contracts are above 19.00, with the March and April contracts knocking on the door of $20.00.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.52 |
| 6 Month: | $17.35 |
| 9 Month: | $17.69 |
| 12 Month: | $17.68 |
CHEESE:
Spot milk prices are increasing, with prices ranging from $1.00 under to $2.00 over class. Some of the newer facilities are purchasing spot milk to increase their production, which is tightening the availability of spot milk. Cheese production is strong and is expected to increase as the spring flush begins next month. Retail cheese demand has improved while demand from food service has remained steady.
BUTTER:
The price increased with no loads traded. Sellers have butter available but are holding for higher prices as long as buyers remain aggressive. Price weakness may be short-lived as inventory in January was 17% below a year ago. Low prices have cured low prices, but the upside potential is uncertain.
OUTSIDE MARKETS SUMMARY:
May corn closed up 3.50 cents per bushel at $4.4200, May soybeans closed up 9.75 cents at $11.6500, and May soybean meal closed up $7.40 per ton at $321.80. May Chicago wheat closed down 3.50 cents at $5.6975. April live cattle closed up $1.18 at $240.28. April crude oil is down $0.07 per barrel at $65.56. The Dow Jones Industrial Average is up 308 points at 49,482, with the NASDAQ up 288 points at 23,152.
