OPENING CALLS:
| Class III Milk Futures: | 5 to 10 lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 7 to 10 Higher |
| Soybean Futures: | 8 to 12 Higher |
| Soybean Meal Futures: | $1 to $4 Higher |
| Wheat Futures: | 1 to 3 Higher |
MILK:
The fall of cheese prices took all by surprise Thursday. Milk futures had already anticipated some weakness, trading lower into spot trading. But the magnitude of the decline and the speed at which blocks declined was incredible. Interestingly, Class III futures trimmed losses into the close. In the past, a decline of this magnitude would have pushed futures limit down. Milk futures Class III milk futures continue to hold some premium to cash as optimism remains in the market. Class IV futures are priced in line with the underlying cash. Milk production is being impacted by the hot weather, but the extent of that impact is not known at this time. That should provide some support to the market unless demand falters. There is some indication of slower demand trickling though the domestic market, but export demand is holding well. Overnight milk futures indicate further pressure on the market this morning.
CHEESE:
Block cheese falling the most in one trading session since November 2020 does not bode well for near-term price strength. Buyers may take advantage of the price decline to purchase supply, but a price bounce might be viewed as temporary. Buyers already have an amount of cheese already purchased ahead and may hold back.
BUTTER:
Price is choppy but holding well. The level of $3.00 seems to be price resistance with buyers and sellers comfortable with doing business at the current level. A tighter cream supply limits butter production. However, output is sufficient to meet demand. Export interest remains strong.
