OPENING CALLS:
| Class III Milk Futures: | 10 to 20 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 8 Higher |
| Soybean Futures: | 10 to 15 Higher |
| Soybean Meal Futures: | $2 to $ Higher |
| Wheat Futures: | Mixed |
MILK:
It was not surprising that milk futures were lower Wednesday, but the surprise was the magnitude of the decline. Markets always have price corrections as they move too far one way or the other compared to underlying cash. The weakness Wednesday did not turn the bullish sentiment as underlying cash remains strong. However, there may be concern over high prices slowing demand. Higher milk prices are needed to cover higher costs of production and the market is trying to find a balance. There is good news for organic farms in the Northeast that were being dropped by Horizon Organic and Maple Hill. Organic Valley is accepting the milk from 90 of those farms allowing them to remain in business producing organic milk. This is certainly good news, and we applaud Organic Valley for taking this huge step to help these farms.
CHEESE:
Cheese prices are expected to increase further but that is not without some stability or even a setback in prices. However, it will be up to demand to support prices. The increasing cost of fuel and other consumer goods may have an impact on dairy demand. Cheese exports remained strong in January and were up 17% from a year ago.
BUTTER:
Price has a way to go to move back to the level it was in January, but it is slowly moving back up. Much of the demand for Easter has already been filled. Buyers are looking ahead for second quarter demand as well as assessing projected needs for the third quarter. Any setback of price is expected to be short lived.
