GENERAL OVERVIEW:
It was another day of pressure on milk futures. Weaknesses in the spot prices eliminated further premiums that the market contained. Fundamental support is difficult to find at present.
MILK:
Traders are wondering just how far spot prices may decline before prices are low enough to generate aggressive buying interest. The heavy milk production keeps a sufficient supply available for bottling and manufacturing. Milk production is expected to remain heavy through the spring flush and potentially after, due to increased cow numbers and production per cow. USDA will release the Dairy Products report on Wednesday, which is expected to show higher output of dairy products compared to a year ago. However, even with higher production, inventory remains below that of a year ago. Buyers are not concerned, as the outlook is for a sufficient milk supply for demand.
AVERAGE CLASS III PRICES:
| 3 Month: | $17.33 |
| 6 Month: | $17.93 |
| 9 Month: | $17.98 |
| 12 Month: | $17.89 |
CHEESE:
The block cheese price remains entrenched in a sideways pattern and may remain in that range for an extended time. Increased cheese output due to strong milk production will continue. It will be up to demand to tighten the supply and increase prices. However, buyers have been purchasing cheese for immediate demand and increasing ownership for later demand.
BUTTER:
Buyers continue to hold back and are purchasing supplies on price weakness. They see no need to be aggressive as long as sellers continue to offer butter on the spot market. The price has not declined as quickly as it increased in January and February, but it has fallen steadily. Low prices have yet to increase buyer interest.
OUTSIDE MARKETS SUMMARY:
July corn closed up 5.50 cents per bushel at $4.8575, July soybeans closed up 19.50 cents at $12.2275 and July soybean meal closed up $1.60 per ton at $320.90. July Chicago wheat closed up 3.25 cents at $6.4100. June live cattle closed down $1.25 at $251.75. June crude oil is up $3.18 per barrel at $105.12. The Dow Jones Industrial Average is down 557 points at 48,942, with the NASDAQ down 47 points at 25,068.
