OPENING CALLS:
| Class III Milk Futures: | Steady to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 8 to 10 Higher |
| Soybean Futures: | 10 to 14 Higher |
| Soybean Meal Futures: | $4 to $6 Higher |
| Wheat Futures: | 20 to 23 Higher |
MILK:
Milk futures closed generally lower Friday in response to the bearish milk production report. However, the cold storage report may reverse some of the negativity as cheese inventory declined. Increased milk production and declining inventory is a sign of continued good demand. The market may not be as bearish as it seems. The other positive aspect was the low number of heifer replacements compared to cows on the Bi-annual Cattle Inventory report. This suggests the nation's dairy herd will not increase very much for a period of time as the replacements are not as available at present. If demand can hold or increase, better milk prices could be forthcoming. Overnight trade, although light, points to stronger futures Monday.
CHEESE:
The decline of cheese inventory was seasonal and nothing to get too excited over. However, the fact that inventory declined during the period of high inflation and some slowing of demand even though milk production increased, certainly is a good sign. Whether cheese prices are down to a level at which buyers will become more aggressive will be seen.
BUTTER:
Inventory remains significantly below a year ago with production unable to move inventory closer to a year ago even though there is some slowing of demand. Reduced butter production is keeping supply balanced with demand. The possibility of price breaking below $2.90 is present. Buyers have been purchasing quite a bit of loads over the past few weeks and may have sufficient on hand for the time being.
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