OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 15 to 20 Higher |
| Soybean Futures: | 35 to 45 Higher |
| Soybean Meal Futures: | $5 to $6 Higher |
| Wheat Futures: | 35 to 50 Higher |
MILK:
Milk futures were higher Monday in response to strength of cheese and butter. Futures price activity showed prices have been in a wide sideways trading range over the past two weeks. The market may be comfortable at current levels with supply and demand balanced. There is sufficient milk available for bottling and manufacturing. Those areas that may be deficit have been able to obtain milk from elsewhere to satisfy demand. Milk production is steady to higher in recent weeks. Weather continues to be good for cow comfort with many farmers reporting strong milk production per cow. However, cow numbers continue to decline due to high feed prices. Grain futures indicate prices could continue to increase due to the impact from the conflict in Ukraine. There is also significant concern over the dryness in the U.S. Fonterra (a large co-op in New Zealand) has suspended dairy exports to Russia at the present time as they monitor the conflict situation. Their exports to Russia amount to about $211 million annually.
CHEESE:
Cheese prices is expected to be choppy as it may be establishing a trading range. A price increase brings out sellers while a decline brings out more aggressive buyers. Inventory and production seem balanced at the present time. However, if milk production continues to decline, supply might tighten later in the year.
BUTTER:
It was expected buyers would be more aggressive after the milk production report, but such was not the case. They have already purchased supply for the Easter season and already have some purchased for the second half of the year. Tuesday begins the old crop/new crop butter rule. On March 1, butter cannot be sold on the daily spot market that has been produced or stored prior to Dec. 1 of the previous year. This may have a bullish impact on spot trading. However, butter produced or stored prior to Dec. 1 can be bought and sold in the country for meeting demand, leaving sufficient butter available.
