OPENING CALLS:
| Class III Milk Futures: | 10 -20 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 2 to 5 Higher |
MILK:
It appears those who were holding sold contracts looked at their computer screens late Tuesday and decided to liquidate their positions in the anticipation cash and futures were going to trend higher. This triggered more aggressive buying in Class III futures. Class IV futures showed no activity overnight. The market was beat down quite a bit over the past two weeks, so a rebound was likely. The extent of the rebound is uncertain. USDA will release the World Agricultural Supply and Demand report Tuesday morning while will provide some guidance as to potential feed prices as well as milk prices. The report will show their estimate for milk production for this year and next year. It will also show estimates for milk prices and product prices. This is not a market mover but one to provide some indication of potential.
CHEESE:
The bounce of cheese prices Monday was a welcomed sight as buyers intended to take advantage of lower prices to increase ownership. Although barrel price increased, sellers did not hold back offering loads to satisfy a significant buying appetite. There have been quite a few loads of barrels traded over less than a week with a good amount of demand being satisfied. There is concern whether this could leave price drifting again. Traders of Class III milk futures believe further gains in cheese are possible.
BUTTER:
Butter demand remains strong and is improving as retail purchasing is strong and restaurant demand improves. Demand is being met with fresh production as well as inventoried supply. Reduced butter output leaves more reliance on inventory, which is reducing inventory below year earlier levels. Further price strength is expected.
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