OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 7 to 10 Lower |
| Soybean Futures: | 15 to 25 Lower |
| Soybean Meal Futures: | $4 to $8 Lower |
| Wheat Futures: | 15 to 30 Higher |
MILK:
There is strong support under milk as underlying cash prices remain strong. There is a good possibility milk futures might move to new all-time highs if demand remains strong and milk production continues to decline relative to a year ago. Milk prices have been increasing due to strong demand as well as the fear of tighter milk supply. This is not only in the U.S. but in the world as well. The increase in the cost of production is being felt worldwide, resulting in the decline of cow numbers and per cow milk output. The concern is what the impact of inflation will be on demand. Spot prices and milk futures seem to be establishing a sideways trading range for the time being. The deadline for signing up for the Dairy Margin Coverage program is March 25.
CHEESE:
Cheese prices may be comfortable at the current price levels for a period of time. Supply and demand seem to be somewhat balanced for now with some product moving to inventory. Buyers have been purchasing ahead more than usual for this time of year. They intend to increase ownership in case supply tightens as the year progresses. Retail outlets are ordering further ahead as well in order to make sure they have sufficient supply to meet demand.
BUTTER:
The movement of butter price has been tightening. The large price swings and multi-week price movements have scaled back quite a bit with price becoming choppy. Demand from the food service industry has slowed slightly which may indicate inflation is having an impact on restaurant traffic. However, price is not expected to fall back anytime soon and may move up to retest the highs in January at some point.
