OPENING CALLS:
| Class III Milk Futures: | Steady to 10 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | Mixed |
Outside Market Opening Calls:
| Corn Futures: | 4 to 7 Higher |
| Soybean Futures: | 7 to 10 Higher |
| Soybean Meal Futures: | $2 to $4 Higher |
| Wheat Futures: | 6 to 9 Higher |
MILK:
The substantial decline of milk futures Tuesday put the brakes on the bullishness that had developed in the market. Underlying cash may have run to high, to fast driven by buyers of cheese leapfrogging over each as they needed to increase ownership as quickly as possible. Milk futures jumped in anticipation of continued strength. Underlying weakness quickly impacted milk futures as prices were higher than necessary. Milk production is not slowing down, but rather increasing seasonally as spring flush gets under way. Higher grain prices could have some psychological influence, but it is the income over feed costs that will be the determining factor of milk production. More plants may initiate milk production restrictions for a period of time as they may not be able to handle the increased milk production. Milk futures are expected to trade lower Wednesday as there is a strong possibility of lower cash again.
CHEESE:
Cheese prices may be to high for this time of year. Demand has been good, and the food service pipeline may be filled for the time being. Ongoing demand will then need to be satisfied, keeping prices more in line with production. Price weakness Tuesday may carry over Wednesday as buyers may step back and fill orders on price weakness rather than aggressively chase the market higher as they have been.
BUTTER:
Butter may follow a similar pattern as cheese if the food service pipeline has been rebuilt to a level at which it will now need to be maintained. However, price should remain above cheese due to significantly better international demand than cheese at the present time.
