Friday Midday Dairy Market Summary - Cheese Prices Diverge

OUTSIDE MARKETS SUMMARY:

CORN:	1 Higher
SOYBEANS:	Unchanged
SOYBEAN MEAL:	$3.90 Lower
LIVE CATTLE:	$0.57 Lower
DOW JONES:	348 Points Higher
NASDAQ:	195 Points Higher
CRUDE OIL:	$0.43 Lower

MIDDAY MARKET UPDATE:

Block cheese declined 2.50 cents, closing at $1.4450 with 11 loads traded and three unfilled bids remaining. Barrel cheese price gained 2.75 cents, closing at $1.4675 with seven loads traded and five unfilled bids remaining at the close. Dry whey price gained 2.25 cents, closing at 42.75 with two loads traded. Class III futures are mixed, ranging from 6 cents lower to 12 cents higher. Butter price declined 2 cents, closing at $2.5450 with 15 loads traded and two unfilled bids at the close. Grade A nonfat dry milk price declined 0.75, closing at $1.1750 with two loads traded. Class IV futures are 10 cents lower to 11 cents higher. Butter futures are 0.45 cent lower to 1.00 cent higher. Dry whey futures are unchanged to 0.25 cent higher. 

Friday Morning Dairy Market Update - Traders Wait for Cash Direction

OPENING CALLS:

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

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 2 Higher
Soybean Futures:	6 to 8 Higher
Soybean Meal Futures:	$2 to $3 Higher
Wheat Futures:	2 to 4 Higher

MILK:

The expectations for underlying cash movement Friday are not very great. Market fundamentals are not much to get excited about. Milk production may improve somewhat with the severe weather behind in most cases. Manufacturing plants continue to receive sufficient milk for production. Farms that exit the dairy business have willing buyers for their cattle, in most cases keeping milk production steady. Feed prices have been weakening and do not look as if they will move higher any time soon, which generally will keep milk production strong. Milk futures are expected to drift ahead of spot trading.

CHEESE:

Further pressure may be seen on cheese Friday as buyers hold back, waiting for lower prices and a chance to purchase on the way down. Demand is steady, which has kept inventory from building, but it leaves sufficient supply for demand.

BUTTER:

Butter production is active with a plentiful cream supply available. Price has not fallen as low as it was a year ago but may remain in the current range for an extended period like last year. Inventory has been building but not to a bearish level and the industry is not concerned over present levels. Most churns are running at capacity.

Thursday Closing Dairy Market Update - February Class I Price is $17.99

MILK

The dairy markets seem to be in the doldrums as there is little support being seen from underlying cash and from fundamentals. Milk production is steady and sufficient for both bottling and manufacturing. There was an increase in fluid milk demand ahead of the winter storms, but that has settled down to near normal again. School accounts are being filled with sufficient milk available. Cheese production is steadily keeping buyers supplied and extra production is being moved to the daily spot market to limit the build of inventory. Spot milk remains near the price level of the holidays with prices ranging from $7.00 under class to $0.50 under class. It is a period of slower demand seasonally so there are no expectations for a jump in demand anytime soon. The Class I price for February was released today at $17.99, down $0.49 from the January price.

AVERAGE CLASS III PRICES

3 Month:	$15.61
6 Month:	$16.51
9 Month:	$17.10
12 Month:	$17.42

CHEESE

There is again concern cheese price may move back to the lows. Lower prices will increase buyer interest, but that interest may have a lower threshold. Cheese buyers are not concerned over supply and will continue to purchase on price weakness. Inventory is expected to close the year similar to the level of last year.

BUTTER

Price may have limited upside potential as heavy cream supply keeps churns busy. Some have turned cram away due to plants already being at capacity. Some cream is reportedly being frozen for later use. This may limit price potential for a period. Retail demand is reported as steady with food service demand weaker.

OUTSIDE MARKETS SUMMARY

March corn closed up 1.75 cents per bushel at $4.4400, March soybeans closed up 7.75 cents at $12.1350 and March soybean meal closed up $2.60 per ton at $361.30. March Chicago wheat closed up 3.00 cents at $5.8550. February live cattle closed up $1.73 at $174.83. February crude oil is up $1.52 per barrel at $74.08. The Dow Jones Industrial Average is up 202 points at 37,469 with the NASDAQ is up 200 points at 15,056.