GENERAL OVERVIEW:
Milk futures closed higher following the strength of cheese and nonfat dry milk. The Global Dairy Trade auction trade-weighted average increased 0.1% from the previous event. This was the sixth consecutive increase in the event.
MILK:
The June through November Class III contracts are above $18.00 with the July through November near the mid-$18.00 level. Class IV futures showed April through June contracts above $20.00. This has again improved the outlook for milk prices. However, caution must be exercised as the increases in spot prices have met with resistance at higher prices. Milk production is improving seasonally, and the hope is that demand will increase as well. The Global Dairy Trade auction showed the sixth consecutive increase with a gain today of 0.1%. The average price was $4,330 per metric ton with 19,500 metric tons sold. The Anhydrous milk fat price increased 6.4% to $7,602 per metric ton or $3.45 per pound. The butter price decreased 0.9% to $6,868 per metric ton or $3.12 per pound. There must have been an adjustment made to the price on the previous event, as it was initially reported at $3.05 per pound. Cheddar cheese increased 0.1% to $4,125 per metric ton or $2.23 per pound. Lactose decreased 0.3% to $1.450 per metric ton or $0.66 per pound. Skim milk powder increased 5.2% to $3,409 per metric ton or $1.55 per pound. Whole milk powder decreased 4.0% to $3,709 per metric ton or $1.68 per pound. Mozzarella increased 0.5% to $4,208 per metric ton or $1.91 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.99 |
| 6 Month: | $17.72 |
| 9 Month: | $17.99 |
| 12 Month: | $17.88 |
CHEESE:
The block cheese price is trying to work back up to the high of last week. Spot trading activity has been limited, with sellers either reluctant to offer supplies on the spot market or waiting for higher prices to move supplies. Most cheese plants are running full schedules due to increasing milk receipts. Spot milk is running as much as $5.00 below class. Inventory is increasing seasonally.
BUTTER:
Buyers and sellers seem comfortable doing business at the current price level. Sellers have butter to sell while buyers see value in purchasing at the current price. Butter inventory is increasing, but the increase may not be as much as last year.
OUTSIDE MARKETS SUMMARY:
May corn closed steady at $4.5400, May soybeans closed up 1.75 cents at $11.5700, and May soybean meal closed down $.50 per ton at $311.70. May Chicago wheat closed down 7.50 cents at $5.8975. April live cattle closed up $1.98 at $235.23. April crude oil is up $2.53 per barrel at $96.03. The Dow Jones Industrial Average is up 47 points at 46,993, with the NASDAQ up 105 points at 22,480.
