GENERAL OVERVIEW:
Both Class III and Class IV futures suffered significant losses. It was understandable that Class IV futures would be lower, but it was surprising to see Class III futures show a similar weakness. Steady spot cheese prices and a slightly higher dry whey price should have left futures nearly steady.
MILK:
Milk production continues to increase seasonally, with the spring flush generally just beginning. Growth is expected with production running ahead of a year ago. There is little reason to believe that milk production will slow anytime soon. The outlook for better milk prices and continued high calf prices will keep cow numbers higher and likely increasing. Even with the significant decline of Class III futures today, prices are back to where they were at the close of March. The June through December contracts are solidly above $18.00. Class IV futures have not been as fortunate, with contracts declining since March 24. The only contracts remaining above $20.00 are April and May.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.83 |
| 6 Month: | $18.30 |
| 9 Month: | $18.41 |
| 12 Month: | $18.24 |
CHEESE:
Spot cheese prices remained unchanged, with no interest from sellers to move product. This was bullish from the view that sellers were not anxious to move supplies, but bearish from the view that buyers were not aggressively looking to purchase supplies for demand or to build inventory. Traders were uncertain whether there would be a much further upside potential.
BUTTER:
Increasing retail demand and strong international demand have not been sufficient to provide support for the market. Buyers continue to purchase what they need without chasing the market higher. The available cream for butter production has declined slightly due to the increase in production from other Class II products. However, butter output remains high with manufacturers moving it to the spot market without hesitation.
OUTSIDE MARKETS SUMMARY:
May corn closed up 1.75 cents per bushel at $4.5400, May soybeans closed up 3.25 cents at $11.6675, and May soybean meal closed up $1.40 per ton at $316.60. May Chicago wheat closed down 3.00 cents at $5.9525. June live cattle closed up $0.70 at $247.03. May crude oil is up $1.19 per barrel at $112.73. The Dow Jones Industrial Average is up 165 points at 46,670, with the NASDAQ up 117 points at 21,996.
