OPENING CALLS:
| Class III Milk Futures: | Steady 8 Lower |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 6 to 12 Lower |
| Soybean Futures: | 8 to 14 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 10 to 15 Lower |
MILK:
Sufficient milk supply for all manufacturing and bottling needs keeps a lid on futures prices. Added to that is continued weakness of grain prices. The strong correlation traders made between high corn price means high milk prices has had the rug pulled out from under it. That certainly does not mean that milk prices cannot diverge from corn prices, but it does show that traders should not focus on just one thing and all fundamental factors need to be taken into consideration. The next thing that could impact the market significantly would be hot weather that could reduce cow comfort and milk output. For now, it appears milk output will remain strong and cows that are culled will be replaced and then some, as seen on the Milk Production report last week. There will be light trading activity in milk futures prior to spot trading.
CHEESE:
Spot cheese prices have not yet reached a bottom. There were numerous days during which cheese price came back from their lows during spot trading, indicating some support. However, prices continued to weaken. USDA will release the April Cold Storage report Monday afternoon. Cheese inventory is expected to have increased during the month, but the important comparison will be to a year ago.
BUTTER:
Price continues to hold well even though inventories are large compared to a year ago. Again, this will be key to the inventory report that will be released Monday. The change of inventory from March to April will be important as it will indicate the level of supply and demand for the month, and that could go either way. However, it is likely there was limited growth due to increasing demand from the food service industry during the month.
