OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Higher |
| Class IV Milk Futures: | 4 to 8 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | 3 to 5 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 8 to 12 Higher |
MILK:
There is no doubt milk output will remain higher for much of this year. Increasing cow numbers and higher output per cow will continue unless the summer turns hotter than usual. Higher feed prices will likely not impact overall milk production as higher milk prices may be realized due to the likelihood of significantly lower or no negative Producer Price Differentials. This may increase milk income over last year. Also, the Dairy Margin Coverage program will make up for lower income over feed on many smaller farms. There is strong demand for dairy cattle and replacement heifers, indicating the desire to keep barns full. Class III milk futures should see some strength early until further direction is seen from cash.
CHEESE:
The rebound of spot cheese prices Wednesday was tied to the fact that prices were low enough for buyers to pick up supply for expected upcoming demand. It does not indicate a tightening supply. In fact, cheese output is increasing as more milk is becoming available to manufacturing. The holiday weekend and schools closing for the summer will keep spot milk readily available.
BUTTER:
Price may be headed to the recent low from earlier in the month of $1.7450. Overall demand remains strong, but supply is sufficient for demand. Cream is available even though ice cream production is high. The food service industry pipeline is filled, leaving demand steady from that sector
