OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 7 Lower |
| Soybean Futures: | 10 to 15 Lower |
| Soybean Meal Futures: | $3 to $5 Lower |
| Wheat Futures: | Mixed |
MILK:
The weakness of milk futures over the past two days may not be an indication that a top has been reached. It was likely that the market had been overdone to the upside and needed to correct and move closer to cash. Trading activity might be light and mixed prior to spot trading. Milk production is holding and improving across the country with spring just around the corner. Weather generally has been good for much of the winter which has allowed milk production to remain generally steady. Some areas indicate milk production is improving from the lows, but the overall volume of milk in the country is lower due to heavy culling. It is unclear if this trend will change due to high input costs for producing milk. Dairy cattle slaughter declined in January according to the slaughter report while cow numbers were reduced as reported on the milk production report. The February report may provide a better indication as to whether the trend is changing.
CHEESE:
The weakness of barrel cheese was not unexpected Thursday. The market has had the pattern of retracing at times depending on who is buying or selling on the spot market. Export sales of cheddar cheese was strong in January indicating world demand remains strong. This should provide support to the market.
BUTTER:
The magnitude of the decline of butter Thursday was a surprise. Price fell back to where it had been at the end of last week. Buyers may hold back again Friday to see whether sellers will remain aggressive. Churning remains active supplying current demand as well as building inventory.
