OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 4 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 3 to 5 Higher |
MILK:
It has been an incredible week for Class III milk futures with closer contracts increasing as much as $1.00 per cwt. There are two possible scenarios. Consumer demand is improving, buyers are purchasing ahead for expected demand, or both. Restaurant traffic is improving more rapidly than anticipated, resulting in more product moving to that area to satisfy demand. The issue here is many restaurants had closed their doors and will not reopen again unless under new management. It will take some time to move back to where it was before the pandemic. Buyers may be purchasing to increase ownership for expected upcoming demand and to stock aging programs now rather than waiting until later. Current milk prices are not likely to reduce the level of milk production. Higher feed prices could have an impact if milk prices decline, but not if both feed and milk prices keep pace with each other. USDA will release the World Agricultural Supply and Demand report Friday at 11 a.m. CDT, providing their estimates on grain ending stocks and production. It will also provide estimates on milk production, milk prices and product prices.
CHEESE:
Block cheese price moved above the previous high from mid-March, effectively turning the trend higher. Price is only 21 cents higher than it was on Nov. 19 after the huge price decline that began on Nov. 1. However, the increase of cheese and dry whey prices combined has provided strong support for milk futures.
BUTTER:
Butter turned higher Thursday and will continue to remain supported due to strong exports. Domestic demand is seasonal with the food service industry pipeline sufficiently supplied. Production is being used to satisfy demand, leaving limited amounts moving to inventory. However, it is difficult to know how much is being purchased ahead as a hedge against higher prices later in the year.
