OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 5 to 8 Higher |
| Soybean Futures: | 10 to 13 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 18 to 25 Higher |
MILK:
Milk futures have been under pressure as underlying cash has not uncovered strong buying interest. There was a little flicker of hope Tuesday when blocks came off the low during spot trading, but that has not translated into overnight strength. Dairy products are increasing in price at the retail level, which may have some impact on demand. However, dairy products were seen as a healthy part of the diet with the onset of COVID and that has not changed. Demand is expected to remain strong both domestically and internationally. Fonterra reduced its milk price forecast for the first time in a while. This indicates a slowing of demand as seen on the recent Global Dairy Trade auction. The decline of 8.5% on the auction was the largest decline from event to event since 2015.
CHEESE:
Price has yet to uncover strong buyer interest. Sellers remain aggressive and willing to move product, even though demand remains strong. Higher production and the unwillingness to hold product to fill later demand has kept supply coming to the market. With some buying already taking place for later in the year, holding inventory for seasonally higher prices that may not unfold is not in their business plan.
BUTTER:
Butter remains under pressure as buyers have not been aggressive due to sufficient supply. Production is keeping pace with demand as well as providing supply for later in the year. Buyers have not been sitting on their hands waiting for lower prices but have been purchasing on the way down.
