GENERAL OVERVIEW:
Milk futures closed higher on Monday, except for the March Class III contract. Traders remain optimistic despite limited movement in the underlying cash market. USDA will release the February Cold Storage report on Tuesday.
MILK:
Class III futures showed a second day of gains despite little change in underlying cash prices. Class IV futures continue to increase, with the April through July contracts now above $20. If support is found in the butter price, Class IV futures will quickly move above $21. The strength on Monday was not due to a bullish milk production report, as the report released on Friday was bearish. Milk production was 2.9% above a year ago, with cow numbers up 15,000 head from the previous month. There were only four states of the top 24 states that showed milk production declines. New Mexico declined 5.7% from February 2025. Washington declined 4.5%, Pennsylvania declined 1.9%, and Illinois declined 0.8%. The state with the greatest percentage increase in production was Kansas, with a gain of 28.7%. South Dakota increased 10.6%, Utah gained 7.2%, Oregon gained 6.4%, and Texas gained 5.2%. The remaining states gained less than 5.0%. Strong milk production is expected to continue.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.08 |
| 6 Month: | $17.72 |
| 9 Month: | $18.01 |
| 12 Month: | $17.91 |
CHEESE:
Cheese prices showed little change, with buyers less aggressive in the block market. Cheese output is increasing as milk production improves. The cold storage report is expected to show an increase in inventory, but likely not to any great amount. Demand has been improving, but it is uncertain as to how much more upside price potential there will be.
BUTTER:
The butter price has yet to find support. The decline to this level has been surprising. With lower inventory than a year ago, buyers were expected to step up at a higher level to increase ownership. The cold storage report is expected to show an increase in inventory but remain significantly below that of a year ago.
OUTSIDE MARKETS SUMMARY:
May corn closed down 6.00 cents per bushel at $4.5950, May soybeans closed up 2.25 cents at $11.6350, and May soybean meal closed down $1.40 per ton at $326.60. May Chicago wheat closed down 7.50 cents at $5.8775. June live cattle closed up $1.23 at $234.65. May crude oil is down $10.10 per barrel at $88.13. The Dow Jones Industrial Average is up 631 points at 46,208, with the NASDAQ up 299 points at 21,947.
