Monday Closing Dairy Market Update - April Income Over Feed was $10.42

MILK:

Traders had anticipated cheese prices to increase, pushing futures significantly higher early in the day. Blocks did increase, but steady barrels and lower dry whey trimmed the exuberance, causing Class III futures to fall back from the highs. It was not bearish for the market but resulted in traders turning cautious again. It seems milk futures are finding support based on the movement of underlying cash. This has improved the outlook for milk prices and increased the desire of farms to keep stalls full and push milk production. The FSA released the average soybean meal price for April at $295.03 per ton. This was $8.77 per ton lower than March and down $62.65 from April 2024. This puts the income over feed price at $10.42, resulting in no Dairy Margin Coverage payment.

AVERAGE CLASS III PRICES:

3 Month:	$19.13
6 Month:	$19.30
9 Month:	$19.14
12 Month:	$18.93

CHEESE:

The block cheese price has moved to the highest level since Oct. 3, 2024. It may be difficult for the price to reach and exceed the $2.00 level anytime soon. Cheese production is increasing as more milk is moving to the vat due to schools closing for the summer. This will not overwhelm the market, but it keeps spot milk at a discount of as much as $7.00 below class. As of June 1, the barrel price is being removed from the mandatory reporting used in the weekly pricing of the class prices.

BUTTER:

The butter price has regained most of what it lost on Thursday last week. The price moved to within 1.50 cents of the recent high today. This indicates the market has good support, and higher prices are possible. Buyers are willing to purchase what is offered to the market in anticipation of increased demand.

OUTSIDE MARKETS SUMMARY:

July corn closed down 5.75 cents per bushel at $4.3825, July soybeans closed down 8.25 cents at $10.3350 and July soybean meal closed down $2.40 per ton at $293.90. July Chicago wheat closed up 5.00 cents at $5.3900. August live cattle closed up $1.65 at $211.00. July crude oil is up $2.22 per barrel at $63.01. The Dow Jones Industrial Average is up 35 points at 42,305, with the NASDAQ up 128 points at 19,243.

Monday Midday Dairy Market Summary - Butter Regains More of the Loss

OUTSIDE MARKETS SUMMARY:

CORN:	3 Lower
SOYBEANS:	5 Lower
SOYBEAN MEAL:	$1.10 Lower
LIVE CATTLE:	$1.17 Higher
DOW JONES:	152 Points Lower
NASDAQ:	74 Points Higher
CRUDE OIL:	$2.34 Higher

MIDDAY MARKET UPDATE:

The block cheese price increased 0.75 cent, closing at $1.9550 with four loads traded. The barrel cheese price remained unchanged at $1.87 with no loads traded. There were two unfilled bids and one uncovered offer in barrels, with no interest from the buyers or sellers to accomplish any business except at their price. The dry whey price decreased 0.75 cent, closing at 56.50 with seven loads traded. Class III futures are 4 cents lower to 23 cents higher. The butter price increased 3.50 cents, closing at $2.51 with 26 loads traded. The buyers are willing to purchase what the sellers bring to the spot market, even at higher prices. The price nearly erased the loss, indicating solid support under the market. Nonfat dry milk remained unchanged at $1.2875 with one load traded. Class IV futures are steady. Butter futures are 0.02 to 4.42 cents higher. Dry whey futures are 0.50 cent lower to 0.50 cent higher.

Monday Morning Dairy Market Update - Active Overnight Trading Shows Mixed Prices

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	4 to 8 Higher
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	4 to 5 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	4 to 6 Higher

MILK:

It may be difficult for milk futures to regain the recent losses unless demand increases sufficiently to tighten supplies. The buying frenzy in underlying cash may have run its course for the time being. It certainly was positive that the market had been able to recover the losses that took place in February and March, improving the outlook for milk prices significantly. Milk production is expected to remain strong and above a year ago as milk cow numbers and milk production per cow increase. Hot weather will impact milk output, but we see that each summer to varying degrees. The Federal Order reform is in effect with changes to milk pricing. That will not have any impact on dairy futures, as that has already been factored in.

CHEESE:

Cheese buyers may have reached a threshold of what they are willing to pay for the time being. Cheese production has been steady and will increase as more milk moves to manufacturing. Hopefully, demand will improve to keep supplies from building up.

BUTTER:

The butter price could see further strength with the price recovering from Thursday's losses. The decline may be viewed as a buying opportunity. Butter inventory running 7% below a year ago in April was a surprise and an indication that demand has been performing well. If this trend continues, it will be positive for the price.