GENERAL OVERVIEW:
Both Class III and IV futures were mixed on Tuesday. Spot cheese prices were unchanged, keeping traders uncertain over further strength. Higher butter and nonfat dry milk prices did not trigger buying interest, as the market had the increases already factored in. The cold storage report showed the butter and total cheese inventory below February 2025.
MILK:
Milk futures showed little direction as traders adjusted their positions to remain in line with cash. The limited volatility did not provide much opportunity to scalp the market for a good profit if it were to develop. The overall market did not react negatively to the bearish milk production report, but it may limit the outlook for price potential as the year progresses. However, the February Cold Storage report shows that increased milk production is being absorbed by demand, limiting the increase in supplies. February dairy cattle slaughter decreased by 9,500 head from January, totaling 237,300 head. This is not surprising, as there were three fewer days in the month. However, slaughter was significantly higher than in February 2025, with an increase of 20,300 head. But even with this increase in slaughter cow numbers, there are 211,000 more in the nation's dairy herd than a year ago.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.18 |
| 6 Month: | $17.79 |
| 9 Month: | $18.05 |
| 12 Month: | $17.96 |
CHEESE:
The February Cold Storage report was released on Tuesday. American cheese inventory decreased by 8.2 million pounds from January. This is 3% below February 2025. Swiss cheese increased by 938,000 pounds, totaling 24.5 million pounds, up 2% from a year ago. Other cheese inventory increased 12.2 million pounds, totaling 576.0 million pounds. This was 1% above a year ago. Total cheese inventory increased 4.7 million pounds, totaling 1.387 billion pounds. This was 1% below February 2025.
BUTTER:
Butter inventory increased by 27.0 million pounds, totaling 253.8 million pounds. This was 17% below February 2025. Despite increasing inventory, year-over-year stocks did not increase, as the January inventory was 17% below the previous year.
OUTSIDE MARKETS SUMMARY:
May corn closed up 3 cents per bushel at $4.6250, May soybeans closed down 8.50 cents at $11.5500, and May soybean meal closed down $4.20 per ton at $322.40. May Chicago wheat closed up 2.25 cents at $5.9000. June live cattle closed down $0.05 at $234.60. May crude oil is up $1.05 per barrel at $89.18. The Dow Jones Industrial Average is down 84 points at 46,124, with the NASDAQ down 185 points at 21,762.
