Friday Closing Dairy Market Update - A Strong Week for Milk Futures

MILK

It was a good were for both Class III milk futures. Substantial price gains were realized. Nearby Class III contracts posted gains of about $0.80. Class IV futures showed limited gains. The May Class III milk contract traded above $18.00 this week but was not able to close at that level. The weakness of nearby Class III futures did not change the market with underlying cash showing some weakness but nothing to change the current uptrend. Next week will be the key to whether the market will trade at a higher level or if it will fall back as prices retrace. Milk production has been running slightly below a year ago but is keeping sufficient supply for demand for both bottling and manufacturing. The increase in prices has not been due to a shortage of supply but more of a perception of potential tightening if milk prices remain low. The other side of that is that the potential for higher milk prices will keep production strong and cow numbers stable as farmers will want to keep the stalls full.

AVERAGE CLASS III PRICES

3 Month:	$16.26
6 Month:	$16.92
9 Month:	$17.41
12 Month:	$17.69

CHEESE

For the week, blocks gained 11.25 cents with 29 loads traded. Barrels increased 8 cents with 24 loads traded. Dry whey gained 6.50 cents with three loads traded. Traders have become more bullish on the market, but they continue to remain cautious as fundamentals have not become bullish, but rather more neutral. The increase in dry whey provided good support under the market. The increase in the dry whey price added 39 cents to the Class III price calculation just in itself.

BUTTER

For the week, butter declined 1.50 cents with eight loads traded. Grade A nonfat dry milk increased by 0.50 cent with nine loads traded. The price held most of the strong gains of the previous week, keeping the market in a positive position. Demand is generally steady for the food service industry but is seeing some growth at the retail level.

OUTSIDE MARKETS SUMMARY

March corn closed down 4.50 cents per bushel at $4.4275, March soybeans closed down 14.75 cents at $11.8850 and March soybean meal closed down $4.90 per ton at $356.80. March Chicago wheat closed down 1.75 cents at $5.9975. April live cattle closed up $0.58 at $183.75. March crude oil is down $1.51 per barrel at $72.31. The Dow Jones Industrial Average is up 135 points at 38,654 with the NASDAQ up 267 points at 15,629.

Friday Morning Dairy Market Update - Further Strength Expected for Class III Futures

OPENING CALLS:

Class III Milk Futures:	5 to 10 Higher
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	2 to 5 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	6 to 8 Higher

MILK:

Class III milk futures had a very strong day with large gains like the movement that took place on Monday. The March contract has increased about $1.80 over the past 1 1/2 weeks. The market has uncovered strength due to stronger cheese prices but mostly due to the gain of dry whey. There is a caution that must be exercised as the market may have moved too high, too fast. Any weakness of underlying cash could cause the market to plummet quickly. There are reports that cheese demand has increased internationally with other varieties of cheese seeing more interest. Milk production continues to hold well. If milk prices continue to improve, dairy cattle numbers will stabilize and slowly increase even though replacement heifers are pricey. Farmers will want to keep barns full.

CHEESE:

Block cheese price has moved back to the highest level it has been since November 17, 2023. This has provided support in the Class III market, improving the price outlook. However, the upside may be limited as milk production continues to hold leaving sufficient milk available for manufacturing.

BUTTER:

Domestic butter demand is strong, and inventory is below a year ago. If exports increase this year, the market could become very strong, and prices could increase significantly. Butter futures do not have much premium factored into the market, but they are keeping pace with underlying cash.

Thursday Closing Dairy Market Update - December Income Over Feed Settles at $18.44

MILK

It was a strong day for Class III futures with exceptional trading volume in the March contract. There were over 1,055 contracts traded with the price up 61 cents. Trading volume in April totaled 218 contracts and showed a gain of 56 cents. All contracts through December posted double-digit gains.

The main impact on price movement was the 3.25 cents increase of dry whey, moving the price back to its highest level since June 21, 2022. The monthly average soybean meal price was released with December down $23.67 per ton from November at $440.60 per ton. The price was down $22.25 per ton from December 2022.

This puts the income over feed price at $8.44 and a payment of $1.06 per cwt for those who chose the $9.50 price level and have not reached the maximum for milk production. USDA has yet to announce a sign-up for this year.

AVERAGE CLASS III PRICES

3 Month:	$17.20
6 Month:	$17.72
9 Month:	$17.98
12 Month:	$18.05

CHEESE

The cheese market was a mixed bag of information today. The West indicates international demand has improved as it is being shipped out of port. Demand for cheese varieties other than cheddar has improved domestically. Cheese production is strong but inventory is not growing. Generally, cheese is available for demand. Spot milk prices are running near class, which is good for this time of year. The strong dry whey price received the attention of traders and ignited a spark in the market.

BUTTER

Butter price has seen some weakness over the past two days but is not expected to decline much. Greater support seems to be developing in the market, which may keep the price stronger than it was this time last year.

OUTSIDE MARKETS SUMMARY

March corn closed down 1 cent per bushel at $4.4725. March soybeans closed down 19 cents at $12.0325 and March soybean meal closed down $6.60 per ton at $361.70. March Chicago wheat closed up 6.25 cents at $6.0150. April live cattle closed up $2.48 at $183.18. March crude oil is down $1.87 per barrel at $73.98. The Dow Jones Industrial Average is up 370 points at 38,520 with the NASDAQ up 198 points at 156,362.