OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Steady to 5 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 5 to 8 Higher |
| Soybean Meal Futures: | $4 to $7 Higher |
| Wheat Futures: | 10 to 15 Higher |
MILK:
Milk futures did not react very much to the increase of cheese and butter prices yesterday. Futures came off the lows but did not post strong gains. Class III futures are higher overnight on a delayed reaction, but gains are limited as traders are cautious. The weakness of dry whey and nonfat dry milk cast some doubt over the market. Milk production continues to hold steady or decrease depending on the area. Production is lower than a year ago and is expected to remain that way for a time. Cow numbers seem to have stabilized as farmers balance feed supplies with cow numbers and cost of production. Replacements are tight limiting expansion anytime soon.
CHEESE:
The rebound of cheese prices yesterday is being viewed with caution. This has happened a few times recently only to have prices fall back. This pattern will not last forever, but this increases the concern over price potential. The market will need to prove itself. Traders are still assessing the bearish implications of the cold storage report.
BUTTER:
Price is expected to remain in the range of $2.90 to $3.00 for the foreseeable future. Inventory is lower than a year ago with demand steady overall. Some slowing has been noted in the food service industry, but it has not had a large impact so far. Exports have been holding up well according to the information we currently have.
