GENERAL OVERVIEW:
Milk futures closed much as they traded since spot trading was finished. Milk production in some areas of the country is close to the spring flush peak but is expected to remain higher for a longer duration. The April Agricultural Prices report will be released on Friday.
MILK:
Class III milk futures could not find further support after spot trading closed the day mixed. The weakness of the block cheese price did not generate aggressive buying interest. However, Class IV futures showed substantial strength as traders focused on the increase in price and the trading activity in butter. A substantial volume of butter traded in the spot market, but the price closed higher. Milk production in the Northeast and Central regions continue to increase due to the spring flush, but there are indications that it is nearing its peak. USDA will release the April Agricultural Prices report tomorrow. It contains the average prices used to calculate income over feed for the Dairy Margin Coverage program.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.68 |
| 6 Month: | $17.26 |
| 9 Month: | $17.51 |
| 12 Month: | $17.53 |
CHEESE:
Cheese output schedules are strong as plants utilize the available milk supply. This leaves sufficient supply available for demand. Spot milk prices remain variable in a wide range, with prices ranging from $5.00 under class to $2.00 over class. Retail demand is termed as strong and, in some cases, increasing. However, food service demand remains lighter than usual.
BUTTER:
The butter price showed strong initial gains but could not hold the highs due to the substantial volume of loads offered to the market during spot trading. Some plants in the Southeast are bringing in cream to supplement regional supplies as the weather is impacting cream supplies. This is not expected to have a significant impact on the butter price in the near term.
OUTSIDE MARKETS SUMMARY:
July corn closed up 3.25 cents per bushel at $4.5575, July soybeans closed up 9.25 cents at $11.9450, and July soybean meal closed up $3.50 per ton at $334.10. July Chicago wheat closed up 1.50 cents at $6.2400. August live cattle closed down $1.50 at $241.00. July crude oil is up $0.22 per barrel at $88.90. The Dow Jones Industrial Average is up 25 points at 50,669, with NASDAQ up 243 points at 26,917.
