GENERAL OVERVIEW:
Class III futures closed moderately higher, while Class IV futures were unchanged to mostly lower. Milk futures did not keep pace with the strength or weakness of the spot prices. The February Federal Order class prices were released, with all classes higher than the previous month.
MILK:
The movement of the underlying spot prices did not translate into the milk futures. The strength of the cheese prices resulted in moderate gains in Class III futures. The weakness of butter showed moderate losses in some contracts. Traders are taking the volatility in stride, realizing that the gains or losses on one day may be the opposite the following day. The February Federal Order class prices were released. The Class II price is $15.34, up $1.42 from January, but down $5.74 from February 2025. The Class III price is $14.94, up $0.35 from the previous month, but down $5.24 from the previous year. The Class IV price is $16.29, up $2.74 from January but down $3.61 from January 2025. The Global Dairy Trade auction trade-weighted average increased 5.7% from the previous month. Anhydrous milk fat increased 5.7% to $7,147 per metric ton or $3.24 p4er pound. Butter increased 6.1% to $6,728 per metric ton or $3.05 per pound. Buttermilk powder decreased 0.2% to $3,145 per metric ton or $1.43 per pound. Cheddar cheese increased 4.3% to $4,920 per metric ton or $2.23 per metric ton. Lactose decreased 3.9% to $1,459 per metric ton or $0.66 per pound. Skim milk powder jumped 9.1% to $3,242 per metric ton or $1.47 per pound. Whole milk powder increased 4.5% to $3,863 per metric ton or $1.75 per pound. Mozzarella cheese increased 7.9% to $4,189 per metric ton or $1.90 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.41 |
| 6 Month: | $17.90 |
| 9 Month: | $18.08 |
| 12 Month: | $17.90 |
CHEESE:
The strength in cheese certainly provides some bullishness to the market. Cheese futures were higher, but not as much as would have been anticipated. Futures hold a significant premium to cash and do not need to increase much.
BUTTER:
The large decline in the butter price may be short-lived if all of the unfilled bids below the market remaining at the end of spot trading will need to be filled in the near term. At least it may limit the downside potential.
OUTSIDE MARKETS SUMMARY:
May corn closed down 2.75 cents per bushel at $4.4375, May soybeans closed down 1.00 cent at $11.6950, and May soybean meal closed down $4.80 per ton at $309.90. May Chicago wheat closed down 5.75 cents at $5.6825. April live cattle closed up $4.23 at $238.35. April crude oil is up $0.10 per barrel at $74.66. The Dow Jones Industrial Average is up 238 points at 48,739, with the NASDAQ up 291 points at 22,807.
