OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 5 Higher |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | $1 to $3 Higher |
| Wheat Futures: | 5 to 7 Higher |
MILK:
The gain of milk futures Thursday was confined to April, May, and June Class III contracts with later contracts lower, along with lower Class IV futures. Milk production is slowly improving as the market moves closer to spring flush. However, even with higher milk output and low spot milk prices, some manufacturers indicate they are struggling to meet cheese demand. Some of this might be variety or location specific. Milk production continues to outpace a year ago and increased cow numbers might keep it that way for much of the year. The recent strength of Class III milk futures improves the price outlook, possibly reducing the rate of culling for the time being. USDA will release the February Livestock Slaughter report Thursday, providing the number of dairy cattle slaughtered during the month.
CHEESE:
The divergence of cheese prices Wednesday left traders friendly to nearby milk contracts and negative to later contracts. With continued low-priced spot milk available and strong cheese output, it makes one wonder how much upside potential remains for prices. The February Cold Storage report will be released Thursday afternoon with the focus likely being whether cheese inventories have increased.
BUTTER:
The weakness of butter was a little surprising Wednesday, keeping the market in a range. Supply and demand are balanced. The Cold Storage report Thursday should show an increase in butter inventory with stocks higher than a year ago. Nonfat dry milk price is a concern as there is potential for further weakness, even though the price is down to the lowest level in two years.
