OPENING CALLS:
| Class III Milk Futures: | 20 to 30 Higher |
| Class IV Milk Futures: | 10 to 15 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 6 to 10 Lower |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 14 to 18 Lower |
MILK:
Class III milk futures posted double-digit gains overnight in reaction to the milk production report. Milk production in April weakened, running 1% below a year ago. Production per cow remained unchanged from a year ago and cow numbers did not increase from the previous month. This provided support to the market as traders see little change coming in the months ahead. If demand increased as the year progresses, supplies of dairy products might tighten. The proof Thursday will be whether buyers will be more aggressive on the spot market because of the report or whether they continue to do business as they have been, which has kept prices choppy. What is interesting is that December and January Class III contracts traded lower overnight. Traders anticipate higher milk prices will spur production as the year progresses.
CHEESE:
There is concern the recent price increases may have cheese near the top of the price range of what buyers ae willing to pay. Once current buyer's needs are satisfied, they may step back again. More milk is showing up for manufacturing as schools are winding down for the summer. This may limit upside price potential as more cheese will be available.
BUTTER:
There was no trading activity in butter overnight. The recent price increase on the spot market might have run its course as buyers assess supply and demand. Churning has slowed a little due to a greater demand for cream from other products. However, production is sufficient for demand as well as to build inventory. Price is expected to remain choppy.
