OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | 5 to 10 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 2 to 5 Lower |
MILK:
July through December continued to make new contract highs Thursday as there is concern over the impact of high grain prices on milk production. It is still too early to tell how much impact this will have due to the fact that the crop has been planted, is being planted, or still in the bag, depending on the area of the country. The drought monitor map shows a large section of the western half of the country in some form of drought. However, grain prices have recently backed off and may hold for a bit as weather as weather reports across the world are monitored. The demand for cows and replacement heifers is strong right now as farmer desire to keep barns full and milk production strong. This will keep production above year earlier levels during spring flush. USDA will release the March Agricultural Prices report Friday. The income over feed price should be similar to February due to the sharp rise of grain prices that did not begin until the end of the month triggered by the acreage report.
CHEESE:
Cheese prices are expected to hold, but not move significantly higher either. The rise of spot prices seems to have slowed as buyers are becoming a bit more cautious. There is sufficient supply to keep the market comfortable, but prices are high enough to limit buying in order to limit inventory is case price weakness unfolds. Demand is strong and supplies sufficient to meet that demand.
BUTTER:
Price looks like it will remain right in line with cheese prices. Nonfat dry milk continues to slowly work higher, improving Class IV prices. Churns are active with sufficient cream available. So far, there has been limited diverting of cream from butter production in order to take advantage of higher cream prices. Butter demand remains strong with plants wanting to meet that demand seeing no need to limit production.
