Wednesday Morning Dairy Market Update - Milk Futures May Find Stability

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 3 Higher
Soybean Futures:	6 to 8 Higher
Soybean Meal Futures:	Steady to $1 Higher
Wheat Futures:	2 to 3 Higher

MILK:

Milk futures are finding some stability due to the choppy action of the underlying cash. It is uncertain whether underlying cash prices will hold at the current level and move higher as the summer progresses and buyers prepare for later demand or whether milk production will increase, keeping prices suppressed for an extended period. The April Milk Production report will be released Wednesday and indicate what we may see as the year progresses. I estimate milk production to be 0.8% above a year ago and cow numbers up 4,000 head from March. The better price outlook has likely increased the desire of farms to keep stalls full and push milk production.

CHEESE:

Cheese demand will need to improve to keep supply from building. Cheese production is increasing as more milk moves to manufacturing as schools close for the summer. Buyers may not be quite as active as they had been as the supply of cheese remains readily available. Prices may need to decline somewhat to stimulate buying interest for demand later in the year.

BUTTER:

There is not much to be said about butter, as supply and demand seem to be balanced. Churning remains active with butter inventory higher than a year ago. Buyers purchased quite a bit of butter earlier at lower prices for later demand. This may leave them less aggressive later in the year. The price is expected to remain sideways.

Tuesday Closing Dairy Market Update - Global Dairy Trade Declines 0.9%

MILK:

Milk futures closed mixed after initial weakness in the morning. The fundamentals remained much as they have been leaving the market reacting to daily trading activity. The Global Dairy Trade Auction trade-weighted average declined 0.9% from the previous event. There were 15,194 metric tons of products traded at an average price of $4,589 per metric ton. Anhydrous milk fat increased 0.9% to $7,237 per metric ton or $3.28 per pound. The butter price decreased 1.5% to $7,821 per metric ton or $3.55 per pound. Cheddar cheese decreased 9.2% to $5.007 per metric ton or $2.27 per pound. Lactose fell 13.2% to $1,398 per metric ton or $0.63 per pound. Skim milk powder price decreased 0.7% to $2,817 per metric ton or $1.28 per pound. The whole milk powder decreased 1.0% to $4,337 per metric ton or $1.97 per pound. Mozzarella increased 0.7% to $4,786 per metric ton or $2.17 per pound. The USDA will release the April Milk Production report on Wednesday.

AVERAGE CLASS III PRICES:

3 Month:	$18.84
6 Month:	$18.97
9 Month:	$18.84
12 Month:	$18.62

CHEESE:

Cheese prices may have reached a threshold from which further upside price potential may be limited in the near term. Buyers may not be interested in paying much more for cheese as much of their immediate needs are filled, and it is too early to build inventory for later demand. Inventory is increasing seasonally as cheese production increases, but buyers do not want to increase inventory and pay for storage being uncertain of the increase in demand.

BUTTER:

The butter price is in a range and may remain that way into the summer. Seasonally, the butter price increases during the second half of the year and that is possible this year as well. Retail demand is reportedly increasing as the reasonable price increases buying interest.

OUTSIDE MARKETS SUMMARY:

July corn closed up 7.00 cents per bushel at $4.5450, July soybeans closed up 3.50 cents at $10.5425 and July soybean meal closed down $.80 per ton at $291.10. July Chicago wheat closed up 18.25 cents at $5.4725. June live cattle closed up $0.75 at $212.97. July crude oil is up $0.11 per barrel at $62.25. The Dow Jones Industrial Average is down 115 points at 42,677, with the NASDAQ down 73 points at 19,143.

Tuesday Midday Dairy Market Summary - Traders Focus on Blocks

OUTSIDE MARKETS SUMMARY:

CORN:	6 Higher
SOYBEANS:	2 Higher
SOYBEAN MEAL:	$2.30 Higher
LIVE CATTLE:	$0.50 Higher
DOW JONES:	114 Points Lower
NASDAQ:	49 Points Lower
CRUDE OIL:	$0.20 Higher

MIDDAY MARKET UPDATE:

The block cheese price gained 0.25 cent, closing at $1.90 with 11 loads traded. The price initially declined 1.25 cents before more aggressive buying brought it back up off the low. There were two unfilled bids and three uncovered offers remaining at the close. The barrel price declined 2.00 cents, closing at $1.8350 with two loads traded. The dry whey price declined 1.50 cents, closing at 52.50 cents with five loads traded. The decline of barrel and dry whey prices should have kept significant pressure on Class III futures, but current contracts are mixed, ranging from 15 cents lower to 11 cents higher. The butter price remained unchanged with no loads traded. Buyers are comfortable with the current price, with bids and offers placed during spot trading, but had no interest or need to move those prices. Grade A nonfat dry milk slipped 0.50 cent, closing at $1.2250 with two loads traded. Class IV futures showed trading activity in the March contract with the price up 2 cents. Butter futures are 0.17 cent lower to 0.25 cent higher. Dry whey futures are 0.50 to 1.47 cents lower. The Global Dairy Trade Auction trade-weighted average decreased 0.9% from the previous event.