OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 10 to 15 Lower |
| Soybean Futures: | 12 to 22 Lower |
| Soybean Meal Futures: | $4 to $6 Lower |
| Wheat Futures: | 4 to 7 Lower |
MILK:
Grain prices are lower again on rains that fell over the weekend in areas of the Corn Belt. This takes the edge off some of the concern over high feed prices. However, there is a lot of growing season remaining, which can swing prices violently. The volatility that has been seen in grain prices has had little impact on milk futures over the past few weeks. The weakness of underlying cash has put pressure on the market. There is little for traders to get excited about. USDA will release the May Milk Production report Monday afternoon, which will not be a market-mover, but it will provide a sense of market strength. I estimate milk production to be up 2.4% over a year ago with cow numbers up 4,000 head from April.
CHEESE:
Spot cheese prices continue to remain under pressure as increased cheese production has kept sufficient supply available to the market. Sellers keep offering cheese on the spot market in order to manage supplies. Plants do not want to hold much inventory and speculate on higher prices at some point. Buyers continue to purchase as it is being offered generally at lower prices. This allows buyers to easily meet current demand as well as build some inventory for upcoming demand. That may limit any strong price rally later in the year.
BUTTER:
Price continues to hold within a range as supply is readily available. Demand is easily being met with indication that inventory has been increasing. There will be confirmation of this on the May Cold Storage report on Tuesday. Cream supply has remained sufficient keeping churns more active than usual at this time of year. Price is expected to remain sideways.
