GENERAL OVERVIEW:
The trend is higher in cheese prices, as the market seemingly had support, came to an end today. Whether the weakness in blocks was an aberration or a long-overdue fundamental correction is yet to be seen. Milk production is generally in the early stages of the spring flush.
MILK:
Class III milk futures were lower again as the substantial decline in the block cheese price had not all been factored in. The decline was greater than expected. Spring flush is in the early stages in most areas. It is uncertain how much production will increase over the next two months. There are a lot of cows that could push production significantly higher as cow comfort improves and feed intake increases. Milk futures do not look as good as they did a week ago, but they still look better with the July through December contracts holding above $18.00. Class IV futures have seen pressure, but not as dramatically as Class III. The steady increase in Grade A nonfat dry milk has supported the Class IV market.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.27 |
| 6 Month: | $17.87 |
| 9 Month: | $18.05 |
| 12 Month: | $17.91 |
CHEESE:
The block cheese price fell, eliminating the gains since March 16. A price retracement was expected, but it was not expected to drop as much as it has in one day. Aggressive buyer demand was satisfied, and they stepped back from the market. There was still buying interest, but at lower prices. Milk availability in the Central regions has increased significantly, with more increases to come. Spot milk is running $2.00 to $7.00 under class.
BUTTER:
The butter price has been unable to find support, with the price moving to the lowest level since Feb. 18. Manufacturers continue to run on full schedules but not quite at full capacity. So far this week, there have been 57 loads traded on the spot market.
OUTSIDE MARKETS SUMMARY:
May corn closed down 1.75 cents per bushel at $4.4725, May soybeans closed up 3.75 cents at $11.6200 and May soybean meal closed up $2.30 per ton at $314.10. May Chicago wheat closed down 17.75 cents at $5.8025. June live cattle closed up $0.13 at $245.93. May crude oil is down $18.54 per barrel at $94.41. The Dow Jones Industrial Average is up 1,325 points at 47,910, with the NASDAQ up 617 points at 22,635.
