OPENING CALLS:
| Class III Milk Futures: | 7 to 15 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 4 to 7 Higher |
| Soybean Futures: | 1 to 4 Lower |
| Soybean Meal Futures: | Steady to $1 Higher |
| Wheat Futures: | 8 to 11 Higher |
MILK:
Increased corn price should have an impact on milk prices. Historically, there is a strong correlation between the two. However, they do not move in tandem with some lag times or lead times as prices move throughout the year. A lot of price potential will be determined by planting progress and the number of acres planted. Then, it will be up to the growing season. The other difference might be the level of forward contracting of feed that may have been done by farmers. It seems there is a desire to increase cow numbers again after a period of liquidation. This should keep milk available for bottling and manufacturing as the year progresses. Most of the producers I speak with indicate their cows are milking well and have no plans of slowing down. Overnight milk futures indicate further pressure will be seen until spot trading provides direction.
CHEESE:
Cheese prices seem to have established a sideways range. Price resistance may have been reached with buyer interest showing up on price dips. Buyers have been increasing ownership of production for later in the year resulting in less need to chase the market. Cheese production is steady, and demand remains good.
BUTTER:
Price has been trending lower and has not yet been able to uncover a level of support. Weakness should be limited, however, but the level at which buyers will be more aggressive is uncertain. As long as sellers continue to offer supply to the spot market, buyers will continue to purchase on weakness. Churning is active with cream supply less abundant than it has been.
