OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 7 to 10 Lower |
| Soybean Futures: | 5 to 8 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 25 to 30 Lower |
MILK:
Class III futures were under pressure Tuesday. Initial pressure stemmed from the Cold Storage report with further pressure also coming from the weakness of cheese prices. This leaves futures trading within the range it has been in for the past few months. Class III futures may continue to move within that range as the market balances supply with demand. There is some indication demand for dairy is slowing slightly. This may not result in milk prices falling substantially lower but may limit the upside potential for prices. The May Class III price will set a record and will be announced a week from now. Class IV futures have rebounded back to the highs on the strength of butter and nonfat dry milk. Futures have the potential to move higher.
CHEESE:
The decline of cheese prices was a bit disappointing to traders. Buyers may step back for a brief period as they see sellers being more aggressive. There is some indication that demand may be slowing, resulting in buyers being more cautious with their forward purchases for later this year. More milk is moving to manufacturing, which will provide sufficient supply for demand.
BUTTER:
Price continues to find support, moving closer to the high of the year. Buyers seem to be more aggressive as churning slows. Cream is available, but not as abundant as it had been due to greater demand for cream cheese and ice cream production. Inventory continues to remain below a year ago and is not expected to catch up anytime soon. This should provide support.
