OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Higher |
| Soybean Futures: | Mixed |
| Soybean Meal Futures: | $2 to $4 Lower |
| Wheat Futures: | 5 to 8 Higher |
MILK:
Thursday showed nice strength in milk futures, even though there was not much movement of underlying cash. Even though milk production remains strong and weather is good for cow comfort, there seems to be a sense that the lows might have been established for prices. That is still too early to tell, but buyers of the physical commodity seem to be more interested in purchasing and forward contracting supply at these lower prices. This makes sense as the risk to the downside may be limited and buyers may increase ownership now rather than continue to purchase on an as-needed basis. However, with strong milk production providing sufficient milk for bottling and processing, upside price potential may be limited, and spot prices may hold in a range for a time.
CHEESE:
Unchanged block and barrel cheese prices Thursday provided support to the market. There are times when steady prices are viewed as bearish and other times when they are viewed as bullish. Even though there is a 30.25 cent spread between blocks and barrels, traders viewed steady prices as bullish. Buyers and sellers may have been waiting to see who would be more aggressive, resulting in no activity. Cheese production is strong.
BUTTER:
Price has been creeping higher the past two weeks, providing more support to Class IV futures. Nonfat dry milk has also seen more aggressive buyer interest as buyers sense the low has been established. Strong butter output increasing inventory may keep upside potential limited.
