Thursday Midday Dairy Market Summary - Class III Futures Explode

OUTSIDE MARKETS SUMMARY:

CORN:	$0.02 Lower
SOYBEANS:	$0.19 Lower
SOYBEAN MEAL:	$7.60 Lower
LIVE CATTLE:	$2.22 Higher
DOW JONES:	251 Points Higher
NASDAQ:	139 Points Higher
CRUDE OIL:	$0.13 Lower

MIDDAY MARKET UPDATE:

Class III futures are 15-61 cents higher with March showing the greatest gain. Butter price declined 2 cents, closing at $2.7450 with six loads traded. Grade A nonfat dry milk price remained unchanged at $1.23 with no loads traded. Class IV futures are 2 cents lower to 10 cents higher. Butter futures are 0.10 cents lower to 1.50 cents higher. Dry whey futures are 0.45-2.50 cents higher.

Fluid Milk and Cream - Western U.S. Report 5

In California, milk production is stronger. Some handlers note preliminary records indicate January 2024 milk production is up from December 2023 and above January 2023. Manufacturers relay good balance between milk volumes and processing capacities. Processors relay some planned downtime for maintenance. Demands for all Classes are strong to steady. According to the California Department of Water Resources, as of January 30, 2024, the state has gotten 9.79 inches of precipitation for the current 2023-24 Water Year, down 2.41 inches from the historical mean. 

In Arizona, handlers indicate farm level milk output is steady to slightly lower. That said, milk volumes are meeting the needs of manufacturers. Class I and IV demands are strong to steady. Class II and III demands are steady. 

Handlers note milk production is steady to slightly lower in New Mexico. However, milk volumes are meeting the needs of processors. Stakeholders indicate precipitation and snowfall totals remain below average levels. All Classes have strong to steady demand. 

In the Pacific Northwest, farm level milk output is steady to stronger. Stakeholders relay milk volumes are currently more balanced with processors' needs compared to recent prior weeks with weather-related disruptions. Demands for all Classes are unchanged. 

A few stakeholders say daytime temperatures have set new records in parts of Idaho recently. In the Mountain states, farm level milk output is mixed. Handlers note steady to slightly stronger milk production in Idaho and Utah and steady to slightly lower milk production in Colorado. Some processors indicate fat components have increased  and protein components have decreased in current milk volumes from the dairies. Spot loads are available for buyers. Class demands are strong to steady. 

Although cream is readily available throughout the region, stakeholders say seller offerings are slightly lighter for a few parts of the West. Cream demand is mixed. Multiples moved down across all facets of both ranges. Condensed skim milk spot load demand is mixed.  

Thursday Morning Dairy Market Update - Traders Uncertain of Cash Direction

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 4 Lower
Soybean Futures:	8 to 10 Lower
Soybean Meal Futures:	$2 to $4 Lower
Wheat Futures:	6 to 8 Lower

MILK:

Milk futures have stalled for the past two days as underlying cash has not supported a continued higher trend. Spot prices have not been doing much, turning choppy again. This keeps traders more on the defensive as they think upside potential may be limited. Milk production is below a year ago but continues to hold well. The weather has been and will be good for cow comfort as the forecasts call for continued mild temperatures. Grain prices are not seeing much volatility with the average corn price for December 2023 on the Agricultural Prices report showing an increase of $0.14 from November. The average corn price is lower for January which may impact milk production as there is usually a correlation of price.

CHEESE:

The block cheese price increased during spot trading on Wednesday but was not able to hold the gain. This was negative for the market resulting in selling pressure. However, some of that pressure subsided as afternoon trade developed. A price threshold may have been reached for the time being.

BUTTER:

The decline in butter price may be temporary as there seems to be strong buyer interest. The price is not expected to continue to run higher by leaps and bounds but may be supported overall by keeping an uptrend intact. Butter futures continue to show limited extra price premiums in contracts through the end of the year.