OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 8 to 15 Higher |
| Soybean Futures: | 10 to 20 Higher |
| Soybean Meal Futures: | Steady to $2 Lower |
| Wheat Futures: | 5 to 10 Higher |
MILK:
Milk futures closed higher last week with June and July futures nearing $20.00. The same might hold true for this week if underlying cash prices can hold. Strong demand is being met with increasing milk production. The demand for replacements is high, indicating there is little interest in reducing cow numbers. Increasing milk production will be ongoing for another month or more depending on weather. Increasing feed prices are a concern but may not have much of an impact for the time being. That will become a greater concern down the road if the growing season has some difficulties and crop conditions deteriorate. For right now, there is hope sufficient acres will be planted and grain supplies will be maintained or increased. The daily trading limit for grain futures has been expanded beginning Monday, which could result in greater volatility through the growing season.
CHEESE:
Block cheese price continues to maintain its sideways pattern with price at the same level it was in mid-March. It is unlikely cheese prices will fall back very much unless there is some outside force that would have a significant impact. Higher grain prices and strong demand should keep prices supported. The question is whether there will be much upside potential over the next few weeks or even months. Farmers are pushing milk production, leaving plenty available for demand.
BUTTER:
Price has been struggling since its high on April 12. It seems that the food service pipeline has been filled with demand settling down to maintaining supply. There is indication more butter is moving to inventory again. However, greater cream demand for ice cream production is reducing the abundant supply that has been available for butter production. This should temper some of the growth of inventory.
