GENERAL OVERVIEW:
It was another day of negativity as futures declined in response to lower cash. The Global Dairy Trade Auction trade-weighted average declined 2.8 percent.
MILK:
Dairy futures are in a downdraft and have been unable to find support. Buyers in the spot markets have no reason to step up aggressively to purchase supplies. Manufacturers are moving supplies they produce with the intent of limiting the build-up of inventory. Strong milk output keeps sufficient milk supplies available for manufacturing. Increased milk production compared to a year ago leaves manufacturers and end-users confident that the supply will remain sufficient for demand. The increase in manufacturing capacity has exceeded the volume of milk available, but with the expectation that it will be filled. The Global Dairy Trade auction trade-weighted average declined 2.8 percent from the previous event. There were 12,922 metric tons sold at an average price of $3,979 per metric ton. Anhydrous milk fat declined 1.0 percent to $6,601 per metric ton or $2.99 per pound. Butter declined 2.4 percent to $5,516 per metric ton or $2.50 per pound. Cheddar cheese declined 3.4 percent to $4,471 per metric ton or $2.03 per pound. Lactose gained 4.2 percent to $1,702 per metric ton or $0.77 per pound. Mozzarella cheese declined 5.0 percent to $3,750 per metric ton or $1.70 per pound. Skim milk powder declined 3.6 percent to $3,368 per metric ton or $1.53 per pound. Whole milk powder declined 3.1 percent to $3,589 per metric ton or $1.63 per pound.
AVERAGE CLASS III PRICES:
| 3 Month: | $16.27 |
| 6 Month: | $16.95 |
| 9 Month: | $17.11 |
| 12 Month: | $17.16 |
CHEESE:
Spot milk prices made a substantial change for the previous week. Cheese plants are actively purchasing extra milk to keep plants running at capacity. Spot milk prices range from $2.00 below class to $0.50 over class. There are reports that export interest is improving due to the continued attractive U.S. prices.
BUTTER:
The possibility of the price declining to the low on May 21st is possible before the market finds support. The number of uncovered offers remaining at the close today suggests further price weakness. If buyers turn more aggressive, the upside price potential will be limited.
OUTSIDE MARKETS SUMMARY:
July corn closed up 7.25 cents per bushel at $4.2100, July soybeans closed up 2.00 cents at $11.3200, and July soybean meal closed steady at $304.80. July Chicago wheat closed up 16.75 cents at $6.1275. August live cattle closed down $0.35 at $248.85. July crude oil is down $0.43 per barrel at $75.62. The Dow Jones Industrial Average is down 507 points at 51,493, with the NASDAQ down 355 points at 26,022.
