OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Higher |
| Soybean Futures: | 8 to 10 Higher |
| Soybean Meal Futures: | $4 to $5 Higher |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Without underlying cash price direction, the milk futures were generally steady with some contracts drifting higher. Overnight trade was almost nonexistent as traders had nothing to provide volatility. Strong milk production continues to supply the market with spot milk still holding a large discount to class. Slower demand may result in inventory building more quickly than usual with total cheese continuing to remain at record levels. The World Agricultural Supply and Demand report will be released today, which provides USDA's estimates of milk production, dairy product prices and milk prices for the year. This is generally not a report that moves the market. The Quarterly Grain Stocks report will also be released. These reports will provide direction for grain prices.
CHEESE:
The block/barrel spread remains at 38.25 cents, which is unusually wide. However, there is no indication that this spread will move together nor does the wide spread provide any indication of price direction. Cheese demand at the retail level is termed as soft but is still holding well considering the increased costs consumers are paying for food. Consumers still see dairy as an important part of their diet.
BUTTER:
Buyers have not been as aggressive contracting supplies for the year. Increasing churning is putting more butter on the market, limiting the concern over supply. Buyers seem content to wait and see if price may decrease further and how demand will unfold before stepping up to establish contracts more aggressively.
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