GENERAL OVERVIEW:
Traders did not receive much price direction from the underlying cash. Class III futures did increase due to the minor increase of both block cheese and dry whey, but the gains lacked conviction. Class IV futures were lower with activity in only three contract months.
MILK:
Class III futures posted minor gains due to the increase in both block cheese and dry whey prices. Trading volume was very light as traders lacked a clear price direction. The market gives the impression that it will remain choppy for a time as milk production increases seasonally, keeping the market well supplied. It was unusual to see the amount of trading volume in a single Class IV contract. The June contract had a volume of 100 contracts traded. The only other contracts that were traded were the May and July contracts, with very light activity. The lower Class IV prices may be short-lived as the nonfat dry milk price continued to increase with no sign of buyer resistance.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.37 |
| 6 Month: | $18.04 |
| 9 Month: | $18.24 |
| 12 Month: | $18.04 |
CHEESE:
The block cheese price broke below the uptrend that had developed since the middle of January. The price may move sideways at best for the time being, as the increasing supply of milk is being made available for manufacturing. Demand is good, but buyers may remain unaggressive due to the anticipation of sufficient supplies.
BUTTER:
The butter price remains in a downtrend and is having difficulty finding sold support. Demand is good, but the supply is sufficient, leaving buyers unaggressive in the spot market. Even though the price is low, buyers have not seen the need to bid higher to increase ownership of supplies and build inventory for later in the year.
OUTSIDE MARKETS SUMMARY:
May corn closed down .75 cent per bushel at $4.4025, May soybeans closed down 13.50 cents at $11.6225, and May soybean meal closed up $.10 per ton at $331.90. May Chicago wheat closed up 11.25 cents at $5.8225. June live cattle closed down $0.68 at $248.53. May crude oil is up $1.33 per barrel at $97.90. The Dow Jones Industrial Average is up 302 points at 48,218, with the NASDAQ up 281 points at 23,184.
