OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 5 to 7 Lower |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | $1 to $3 Higher |
| Wheat Futures: | 8 to 12 Lower |
MILK:
Monday was a blow to the market as cheese and butter prices weakened further. Traders just could not overlook the weakness, selling futures aggressively. Overnight trade shows some stability with Class III futures mixed. However, traders will not be willing to forget the pressure Monday and will be cautious prior to spot trading. Some projections for substantially higher milk prices later this year keep some optimism in the market. Milk production will be impacted by the extreme hot weather that has moved into many parts of the country the rest of this week. It will put cooling systems to the test, challenging cow comfort and feed intake.
CHEESE:
The weakness of cheese recently has been a little surprising. Lower prices were anticipated to uncover more aggressive buying interest, but that has not happened. It seems buyers have already purchased a portion of what is needed to meet demand, as well as for later demand. This has already put them in a position at which they are comfortable with supply. With the uncertainty of demand due to inflation, some buyers may not need to be very aggressive for a while.
BUTTER:
One wonders if price has reached its peak. Buyers may not be willing to purchase butter at these higher levels. There has already been product purchased ahead of time with the concern over supply later in the year. However, with some slowing of demand, the concern over tighter supply may not be an issue. Export demand will play a large role in price strength as the year progresses. Further weakness is expected Tuesday.
