OPENING CALLS:
| Class III Milk Futures: | 5 to 12 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | Steady to 2 Lower |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 1 to 2 Higher |
MILK:
Traders did not respond to the overall higher calculation of cheese prices. The gain of barrels more than offset the decline of blocks. Traders did not react to blocks bouncing 3 cents off their lows yesterday. Trade may reflect this prior to spot trading Tuesday, but traders will be cautious over spot activity. Buyers have little concern over supply due to strong milk production. Spring flush is just around the corner, which should increase milk supply significantly. There is concern over the impact increased milk supply during spring flush might have on spot prices. The Central region continues to report some spot milk still being offered as much as $10.00 under class. Historically, spot milk would be around $1.50 under class at this time. However, culling may increase significantly due to lower milk price and strong cull cow prices. This could reduce milk supply. The Global Dairy Trade auction will take place Tuesday.
CHEESE:
The divergence of cheese prices Monday and blocks coming back off their lows as buyers turned more aggressive leaves traders uncertain of Tuesday's activity. Spot prices are expected to remain choppy, leaving traders scalping the market in the hopes of taking small profits rather than long-term positions.
BUTTER:
Price is expected to remain in a range as churning is active with inventory building and demand being met. Buyers and sellers are comfortable at the current price with no concern over supply. Nonfat dry milk price may test the lows in the near term as supply remains plentiful.
