OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Higher |
| Class IV Milk Futures: | Steady to 6 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 8 Lower |
| Soybean Futures: | 10 to 25 Higher |
| Soybean Meal Futures: | $3 to $6 Higher |
| Wheat Futures: | 10 to 25 Lower |
MILK:
The few trades that took place in Class III futures overnight indicates that further strength will unfold Tuesday. There is little reason to believe underlying cash prices will trend lower anytime soon. There is too much concern over the rising cost of production impacting milk production as time progresses. The January slaughter report indicated culling was slowing relative the December and to a year earlier. However, that may not necessarily indicate that cow numbers will rebound anytime soon. Farmers may not be willing to add cows when other prices continue to escalate, resulting in increasing cost of production. The focus will be to reduce costs and at best, hold where they are with cow numbers and production. Weather will be critical for feed prices this spring as planting takes place and the growing season gets under way.
CHEESE:
Buyers continue to purchase what comes to the spot market in the attempt to increase ownership of supply. Buyers are looking further out and purchasing for not only orders but for expected demand as the year progresses. There is fear of continued tightening supply of milk if the cost of feed and supplies continues to escalate. Buyers would rather buy now and pay for storage rather than hope for a retracement of prices.
BUTTER:
Price is trending higher but at a slower pace than cheese. Price is fluctuating a bit more rather than moving straight up. Buyers have needs covered for the Easter season and have already been looking ahead to second quarter demand. Churning is active with output satisfying demand as well as building inventory.
