OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | 3 to 5 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 4 to 6 Lower |
Class III milk futures have retraced significantly this week following the weakness of cheese. Buyers of cheese have purchased sufficient supply for now and do not need to be as aggressive. Traders liquidated some of their long positions as cheese prices slipped. Milk production is steady with some areas indicating production has increased slightly. There is greater demand for cows as some farms want to fill up stalls again. Due to a tighter heifer market, they are looking for cows from other farms and at sale barns. This in not going to flood the market anytime soon, but it is signaling a change in attitude. Mixed futures prices are expected prior to spot trading.
CHEESE:It is unclear just how far cheese prices will weaken before buyers view it as a buying opportunity. It may be too early for aggressive buying for second quarter expected demand, leaving buyers purchasing on an as-needed basis for the time being. Dry whey price made a new record high Thursday. The last time price moved near this level, demand was impacted and price fell back steadily for an extended period of time. The market is different than it was in 2007, which could keep price higher as demand is more diverse. However, high price and inflation may impact the market.
BUTTER:Price looks like it will test the $3.00 level with renewed buying interest. World price and demand is strong, but U.S. price is now above world price. Traders are still not convinced butter price will hold as they continue to hold a substantial discount to cash. Churning is increasing, which may slowly increase supply.
