OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $3 to $5 Higher |
| Wheat Futures: | 25 to 30 Higher |
MILK:
There is not much volatility expected in Class III futures as it seems underlying cash is expected to remain choppy. Class IV futures are expected to continue to see good support as butter price slowly increases. Milk production across the country is generally steady at low levels of the year. More milk is being processed for school accounts, which should tighten manufacturing supply. However, cheese output is sufficient to satisfy demand and even build some inventory. There is some lingering hot weather in a few areas, suppressing milk output potential. Milk production is not expected to rebound very quickly but with reduced overall demand, supply remains plentiful.
CHEESE:
Spot cheese prices are expected to remain choppy. Buyers have not been very aggressive on the spot market but have had to come at times to purchase extra supply to fill orders. Price strength has been limited and short-lived but may be at or near a bottom. However, that does not indicate prices will trend higher from here but more likely move sideways for a time. If that is the case, then Class III milk futures will roll down as each month approaches settlement.
BUTTER:
The butter market is similar to the used machinery market. Buyers continue to step up to purchase on the possibility prices will continue to increase and supply tighten. More cream is beginning to be available as school milk is being standardized, the holiday is past and ice cream production is slowing. Butter output should improve, depending on plant capacity.
