OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 5 to 7 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $1 to $3 Lower |
| Wheat Futures: | 10 to 14 Lower |
MILK:
Class III milk futures had an impressive day Thursday despite the decline of the class price calculation due to the weakness of barrel cheese and dry whey. The strength stemmed from the April Milk Production report showing a decrease in milk production of 1% from a year ago. If this weakness were to continue, it is possible milk supply could tighten later this year when demand increases seasonally. However, the other side of the equation is the rising concern over a looming recession and what that could mean for demand. Milk futures might stabilize or even retrace a bit until spot trading provides further direction Friday. Due to the significant increase of Class III futures Thursday, higher cheese price could be met with lower futures as futures were overdone to the upside. Class IV futures should remain supported.
CHEESE:
Cheese prices are not expected to fall apart anytime soon, but there may be some price fluctuations as the summer progresses. However, the concern will be for demand if fuel price remains high and the economy moves into a recession. There is a strong possibility this may happen, and it will have an impact on the market.
BUTTER:
Price is pushing higher as buyers want to increase ownership of supply for later in the year. This may temper a bit as buyers assess the possibility of a recession. USDA will release the April Cold Storage report on Monday, showing whether butter stocks continued to increase during the month.
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