Weekly Dairy Report

by Valley Futures Trading, LLC.

Vol. 08, No. 18 May 2, 2008

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Bull vs. Bear

Bull Horns: 

Ø   The milk-to-feed ratio for April was reported this week at 1.90.  This is down 17 points from last month and 61 points lower than April-2007.

Ø   Cream supplies are reported as being steady to higher, but butter prices continue to rise.  The CME cash butter gained 2¾¢ this week to finish at $1.44.  Many attribute the price increase to international demand and the fact that buyers are aggressively buying for both current and future needs.

Ø   The CME cash cheese market gained more ground this week, as the blocks added 1½¢ to finish at $1.94 and barrels picked up 5¢ to end the week at $1.93.

Ø   Dairy Market News reported this week that cheese production is higher, but market uncertainty has manufacturers limiting stock levels, as they prefer to only fill current orders.

Ø   Monday’s Planting Progress report showed only 10% of the nation’s corn planted, compared to the 5-year average of 35%.  The planting progress for this upcoming Monday’s report is estimated between 27% - 32%, which would be well below the 5-year average of 64%.  Corn prices were up 22¾¢ this week, making a new all-time-weekly-high-close of 6.13½.

Bear Claws:

Ø   According to Fluid Milk & Cream Review, some industry participants are suggesting that the weak fluid milk sales can be attributed to higher retail prices and other economic pressures that consumers are experiencing regarding family budgets.