OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 10 to 30 Higher |
| Soybean Futures: | 12 to 30 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 20 to 30 Higher |
MILK:
Class III milk futures are headed back to the highs unless cash prices stall at current levels. Even without full support from underlying cash, futures are increasing as traders are looking at escalating grain prices. The question will be at what point culling will increase significantly and impact milk output. There will be a delayed reaction to this. The potential for higher milk prices will slow any quick decision to cull cattle unless there is a replacement that might increase profitability. Milk production is still expected to exceed the level of last year for the foreseeable future. This will keep sufficient milk supply to satisfy bottling and manufacturing needs. Grain prices continue to escalate with May corn reaching the expanded limit gain of 40 cents during overnight trade.
CHEESE:
There is interest in purchasing cheese, but there is also interest in selling to keep product moving due to strong a manufacturing pace. Many plants are running at capacity and trying to move cheese to the market as quickly as possible rather than build inventory. Increased demand from the food service industry is keeping product moving. Price could remain choppy.
BUTTER:
There has been some recent news that international interest might be slowing due to the higher price. However, that does not seem to be the only cause as world price is still quite a bit higher than the U.S. price. It is likely supply is catching up with demand, leaving buyers less aggressive. Price may drift in the current range for a period of time.
