OPENING CALLS:
| Class III Milk Futures: | Steady to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | $1 to $3 Lower |
| Wheat Futures: | 3 to 4 Lower |
MILK:
Class III milk futures have increased despite the weakness of cheese and dry whey prices. Friday may be a pivotal point as the divergence in prices cannot remain. Overnight trading was light and confirmed to April and May contracts with those contracts posting double-digit losses. However, many times, overnight trade is not a good indicator of the direction of the market during the day. Spot trading activity and direction will be watched closely with traders to react quickly relative to strength or weakness. Although not directly related, the USDA's Quarterly Grain Stocks report, and the Prospective Plantings report will be the main reports watched by agricultural traders. USDA will release the February Agricultural Prices report Friday afternoon, providing average prices used in the calculation of income over feed. The average soybean meal price is not part of that report but is calculated from weekly prices by the FSA. Most often that is not released until the following day. We may not know income over feed used for the Dairy Margin Coverage program today. I expect there will be a payment as income over feed should be below $9.50.
CHEESE:
Cheese prices have declined significantly this week. It is unclear whether there will be further weakness today. Based on the activity Thursday during spot trading and unfilled bids remaining below the market, there could be further pressure. However, the needs of buyers and sellers change each day depending on order and whether they can buy or sell through regular channels in the country.
BUTTER:
Price is not expected to change much in the foreseeable future. Supply is meeting demand as well as rebuilding inventory. Ice cream production is utilizing more cream but sufficient supply remains, keeping plants operating on full schedules. Price is expected to remain choppy.
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