OPENING CALLS:
| Class III Milk Futures: | 30 to 75 Higher |
| Class IV Milk Futures: | 30 t0 60 Higher |
| Butter Futures: | 1 to 3 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 25 to 35 Higher |
| Soybean Futures: | 40 to 50 Higher |
| Soybean Meal Futures: | $7 to $10 Higher |
| Wheat Futures: | 45 to 50 Higher |
MILK:
The milk production report fueled bullish trading activity late Wednesday and pushed some contracts limit up overnight. The 1.6% decline of milk production from January 2021 and the decline of production per cow of 15 pounds put a whole new optimism in the market. The decline of production from a year ago was the largest decline since October 2009. Added to that is the renewed strength of grain prices, which could further curtail milk production as the year progresses. Russia invading Ukraine overnight sent grain futures sharply higher. It will be interesting to see how spot trading will unfold Thursday.
CHEESE:
The weakness of barrel cheese may be short lived. Buyers could step back up to the plate more aggressively as they see the decline of milk production and the higher cost of production potentially tighten milk supply further. Buyers may be more aggressive similar to how they were after the higher projected prices on the World Agricultural Supply and Demand report. They may turn their attention to purchase yet further in the future to try to get ahead of lower milk production and higher product prices. Seller may hold back to see how aggressive buyers will be.
BUTTER:
Buyers may be more aggressive in the spot market as they see the potential for reduced milk production as the year progresses. Buyers have already been purchasing for second quarter orders and expected demand. They may now step up and purchase supply for further in the future. They will rather pay storage than take a chance on higher prices as the year progresses. Traders may put more premium in futures contracts in anticipation of higher cash prices.
