Opening Calls:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 4 Lower |
| Butter Futures: | Steady to 1 Lower |
Outside Market Opening Calls:
| Corn Futures: | 4 to 8 Lower |
| Soybean Futures: | 14 to 18 Lower |
| Soybean Meal Futures: | $3 to $5 Lower |
| Wheat Futures: | 5 to 8 Lower |
Milk:
New contract highs in June and later futures indicates traders are bullish on milk prices as the year progresses. April Class III futures did reach above $18.00 for a brief period of time Tuesday but could not hold that level. Class IV futures continue to remain $2.00 or more below Class III. A strong influence on Class III pricing is the high dry whey price. Dry whey is at the highest level since spot trading of dry whey began on the CME in March 2018 and the highest it has been for quite some time. Each penny move of dry whey equates to a move of 6 cents for Class III. Since early July 2020, Dry whey has increased 30.75 cents. This translates into an increase in Class III pricing of $1.8450. Whey certainly has had a large influence on current milk prices. USDA raised their estimate for the average whey price this year to 50 cents. This is nearly 14 cents higher than 2020. However, even though they raised the Class III price for the year to $16.75, it remains far below the average for 2020.
Cheese:
Even though barrels exhibited some weakness Tuesday, it certainly does not mean the price strength has ended. There does remain a large spread between blocks and barrels, which has been common the past few years. It is critical cheese prices do not increase too quickly and too far that demand will be affected. However, with more stimulus money coming and restaurants increasing capacity, demand may remain strong.
Butter:
The weakness of butter Tuesday may only be temporary similar to what we have seen the past few times price retraced. Exports continue to regain what was lost last year as international interest is strong and price is competitive. Output is also strong, which may limit price potential, but a butter price in line with cheese prices is always a good thing.
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