OPENING CALLS:
| Class III Milk Futures: | 20 to 30 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 14 to 18 Lower |
| Soybean Meal Futures: | $4 to $5 Lower |
| Wheat Futures: | 8 to 12 Higher |
MILK:
The slight weakness of Class III milk futures Friday was negated overnight and then some as futures traded significantly higher. Higher trade is the reaction to the bullish cold storage report for cheese. A decline of inventory in American cheese and total cheese is not typical during this time of year. Lower milk production than a year ago is having some impact on the output of cheese. Continued strong demand is also having an impact on supply. The milk production report showed cow numbers might be trending higher, but production remains below a year ago. If demand continues to remain strong, it may be difficult for inventory of cheese to increase for a time. Class IV futures may struggle a little as butter inventory increased. However, butter stocks remain 20% below a year ago, which should provide support.
CHEESE:
This is the third consecutive month that American cheese inventory declined. Generally, inventory increases this time of year and then decreases the second half of the year. Lower milk production and good fluid demand leaves milk available for cheese production, but not as much as is needed to meet demand and build inventory.
BUTTER:
Price continues to exhibit weakness as demand is being satisfied and inventory is growing. However, it is not gaining on the level of last year with March inventory 20% below a year ago. Further weakness is expected.
