Opening Calls:
| Class III Milk Futures: | 4 to 10 Higher |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | 1 to 2 Higher |
Outside Market Opening Calls:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 8 to 14 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 2 to 4 Higher |
Milk:
There was a fair amount of trading activity in Class III futures overnight with contracts through June 2021 posting activity. That is very unusual as contracts that far out generally do not trade in the overnight. This activity may be tied to the passage of the American Rescue Plan stimulus package over the weekend. More money into consumers' hands could increase demand for dairy products. The bill does extend a 15% increase in funding for the Supplemental Nutrition Assistance Program through September. This was initially to end at the end of June. However, there has been no indication of another Farmers to Families Food Box program. But something similar could be instituted before the end of April when the current Food Box program runs out. Milk futures are expected to trade higher prior to spot trading and then adjust accordingly.
Cheese:
Cheese prices have shown strength and may be breaking out of the range they have been in for quite some time. Restaurant demand is improving, resulting in greater buying activity as restaurants need to increase orders as more people are eating out again. This may be a slow process, but demand should continue to improve. The other side of this is it may reduce retail demand to some extent, somewhat offsetting each other.
Butter:
The strength of butter is the result of increased export interest and further restrictions being lifted for restaurants. It is not due to a tightening market as there are plentiful supplies. Strong demand could keep inventory from building too much during the first half of the year, putting the market in a better position for the second half of the year. Traders may be cautious prior to spot trading due to the price having increased very quickly, raising concern whether the market could have increased too fast.
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