OPENING CALLS:
| Class III Milk Futures: | 3 to 10 Higher |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 5 Lower |
| Soybean Futures: | 11 to 13 Lower |
| Soybean Meal Futures: | $3 to $4 Lower |
| Wheat Futures: | 11 to 13 Lower |
MILK:
Traders are uncertain as to how much strength underlying cheese prices will have. Buyers of cheese may not be willing to purchase for anticipated demand but only on an as-needed basis. Increasing milk production will provide both bottlers and manufacturers with sufficient supply to meet demand. Milk production is expected to continue to rise through the rest of the year. The potential for lower milk prices will not have an impact on milk production for a while and maybe not for the rest of the winter. Feed supplies have been replenished, although the cost of that feed may rise as hauling costs may increase significantly if the diesel fuel supply tightens further. Cost of production continues to remain high and might become worse yet as the year progresses. That may eventually impact milk output, reducing supply but that may take some time.
CHEESE:
Cheese trading activity remains light on the spot market. That may indicate buyers are coming when they need to fill orders and not to purchase supply for anticipated demand. It may be difficult for prices to move above $2.00 and if they do, it may be short lived.
BUTTER:
Maybe the decline of butter is slowing down. The large decline has rattled the market with many staring in disbelief. How can a market move from tight supply to abundant in such a short period of time? The answer is that it didn't. Inventory has been significantly less than a year ago and remains that way. What changed is perception. Buyers and consumers had been fearing a shortage and purchased earlier. Now they have sufficient supply, and the fear of a shortage has evaporated. Price will now move to a level to stimulate demand. It is unclear where that level will be.
