OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 5 Higher |
| Soybean Futures: | 1 to 8 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 3 to 5 Higher |
MILK:
There has been little change fundamentally with the exception of high feed prices. This is causing a crunch to farms that have been purchasing feed on an as-needed basis. It is too early to tell how the crop will turn out this year as planting has basically just gotten underway with soil temperatures in the Corn Belt still rather cold. That can change quickly as the calendar rolls over into May this weekend. Even with a good crop, farmers will look at higher grain prices than last year likely through the coming year. Higher milk prices will offset some of that or maybe all of it if milk prices increase. Typically, higher feed prices mean higher milk prices, but it will take some time before this becomes evident. Cow numbers are large and milk production is strong. This may not change anytime soon. The market has an upward bias for the time being.
CHEESE:
Even though cheese output is strong, and inventory is increasing, demand has been pulling substantial amounts of cheese to the market. First quarter sales for McDonald's surpassed sales numbers of two years ago before there was COVID-19. The restaurant industry in general has rebounded more quickly than anticipated increasing demand for cheese.
BUTTER:
A few years ago, McDonald's switched to using butter in their restaurants and increasing traffic is good for butter demand. Other restaurants followed suit after McDonald's did. So even if there is less consumption at home, it is being offset by consumption away from home. Recently, retail sales of butter have slipped, but overall demand is strong.
