GENERAL OVERVIEW:
Class III futures were mixed despite the decline in block, barrel, and cheese prices. Class IV futures were mixed despite the huge increase in the butter price, with some of the strength offset by the decline in nonfat dry milk. Income over feed for January was $7.81, the lowest since August 2023.
MILK:
Class III milk futures were mixed despite the decline of the cheese and dry whey prices. Futures are adjusting to the underlying cash prices, with prices moving relative to what traders anticipate prices to be based on current fundamentals. The surprise strength in the butter price is a mystery with no specific change in the market today or over the weekend. Buyers are excited to increase ownership and have become very aggressive. The number of unfilled bids suggests further strength might be seen on Tuesday. The average soybean meal price for January was $299.25 per ton. This was a decline of $12.68 from December and a decline of $17.72 per ton from a year ago. The income over feed was $7.81 and the lowest since August 2023. The payment for those who chose the $9.50 level is $1.69 per cwt.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.12 |
| 6 Month: | $17.06 |
| 9 Month: | $17.49 |
| 12 Month: | $17.54 |
CHEESE:
Cheese prices are moving somewhat in line with the current fundamentals of strong milk production, and the market moving toward the beginning of the spring flush. Cheese production will increase as more milk becomes available. It will be up to demand to utilize the increased cheese supply to meet the current prices the futures market shows. The hope is that the demand will improve sufficiently to utilize increased supplies.
BUTTER:
The jump in the spot butter price moved it to the highest level since Aug. 26, 2026. There were 15 unfiled bids remaining at the close, suggesting further strength on Tuesday. However, buyers may not be willing to push the price much higher at this time as the current supplies of butter are not tight. Continued strength may slow down international demand.
OUTSIDE MARKETS SUMMARY:
May corn closed down 2.75 cents per bushel at $4.4575, May soybeans closed down 6.75 cents at $11.6400, and May soybean meal closed down $7.60 per ton at $312.90. May Chicago wheat closed down 14.25 cents at $5.7725. April live cattle closed up $0.88 at $233.10. April crude oil is up $4.28 per barrel at $71.30. The Dow Jones Industrial Average is down 73 points at 48,905, with the NASDAQ up 81 points at 22,749.
