OPENING CALLS:
| Class III Milk Futures: | Steady to 10 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 5 to 10 Higher |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 2 to 4 Higher |
MILK:
There has been continued pressure on Class III futures due to the inability of underlying cash to find any stability. The market is ripe for a price retracement, but as long as underlying cash does not find support, neither will milk futures. There has been good demand both domestically and internationally, but supply continues to remain heavy. There is sufficient milk for those who need it. Most plants still indicate they are running at capacity with no real end in sight. Spot milk continues to carry a discount to class. The monthly slaughter report shows the intention of farms to milk as many cows as they can with May showing the lowest monthly slaughter since July 2016.
CHEESE:
Cheese continues to be offered on the spot market as plants desire to move cheese as quickly as possible to limit inventory buildup. There are some plants that have indicated they continue to carry more cheese than they would like and are trying to move it to the market. Upside price potential seems limited unless milk supply declines.
BUTTER:
After holding well for quite some time, butter price now seems to be eroding, and there is no indication as to a level of support. Export demand has been very strong, but production has been sufficient to meet that demand as well as domestic demand. Inventory is still 7% higher than it was a year ago, leaving supply sufficient for demand. Further weakness is expected.
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