Opening Calls:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
Outside Market Opening Calls:
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | 4 to 6 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 3 to 5 Lower |
Milk:
Class III futures have been slowly eroding, pulling May, June and December back below $18.00 again. Futures will likely chop around in this area as underlying cash may move within a sideways price range. Traders will not be too anxious to pick a price direction prior to spot trading Thursday. The weakness of barrels and the initial weakness of blocks Wednesday further dampened the enthusiasm of traders. USDA will release the February Milk Production report Thursday. I estimate milk production to be 1.5% above February 2020 with cow numbers 2,000 head more than January.
Cheese:
There is good demand for cheese and increased milk production is readily being absorbed. Some plants are running at capacity and have not been purchasing any spot milk. Dairy Market News reported that some curd producers have indicated a little slowing of orders recently. The restaurant industry may have refilled the pipeline for now and will settle down to steady ordering. Block cheese price coming back up Wednesday after initially declining indicates buyers are willing to buy price weakness. This should keep the market supported, but sideways.
Butter:
Price has not been able to break above previous highs, but neither has it fallen much. There has been increased retail demand for the upcoming Passover/Easter season, which may continue a bit longer, but then will settle down to regular demand. Enough time has passed since the old-crop/new-crop rule on the CME that there is sufficient butter produced since Dec. 1 in order to satisfy buyer interest on the daily spot market as well as build some inventory. Price may have a difficult time moving much higher for a period of time.
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