Opening Calls:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | 2 to 5 Lower |
| Soybean Meal Futures: | $1 to $4 Lower |
| Wheat Futures: | 3 to 5 Lower |
Milk:
It has been a volatile week for milk futures as anticipations of strong buying of dairy products for the Farmers to Families Food Box program that will run through April. Milk futures ran ahead of underlying cash as emotions ran high and traders looked back at what cheese prices did last year as a result of the Food Box program purchases. The short-covering and buying seems to have run its course for the time being. The market is settling down as Class III futures take a breather as prices exceeded the correlation to underlying cash. Cash and futures will align again as futures will wait for cash to catch up. However, further strong gains in cheese prices would push futures higher, but with not quite as much volatility.
Cheese:
Cheese prices have increased significantly the past two days as buying is taking place in anticipation of demand to fill Food Boxes from now through April. Buyers are also stepping up to purchase cheese to rebuild aging program that had been depleted. They would rather purchase now in order to avoid paying much higher prices if they escalate similar to last year. The usual slower demand period may not be so slow this year.
Butter:
The weakness of butter Wednesday was a bit surprising. Even though supplies are large, the buying frenzy of cheese should have spilled over into butter. However, there are some different fundamentals between the two commodities. Price may move higher, but it may follow a similar pattern as last year significantly lagging cheese prices.
