Thursday Morning Dairy Market Update - Mixed Trading Activity Ahead of Cash

OPENING CALLS:

Class III Milk Futures:	Steady to 3 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	2 to 4 Lower
Soybean Futures:	7 to 9 Lower
Soybean Meal Futures:	$2 to $3 Lower
Wheat Futures:	7 to 9 Lower

MILK:

Milk futures slowed their descent Wednesday due to mixed underlying cash trade. Futures are slightly lower Thursday morning with contracts trading on both sides of unchanged during the night. Milk futures may be overdone to the downside with any further strength of underlying cash potential triggering some strength. Any strength will not come from decreasing milk production for the time being but would come from an increase in underlying cash prices. With milk production steadily increasing, there will be no concern over supply. However, lower milk price could increase culling and eventually support the market. But that may take some time to develop. Trading activity may remain limited until spot trading provides direction.

CHEESE:

It will be interesting to see if the heavy selling of cheese may have run its course. There were 16 uncovered offers of barrels remaining after trading Tuesday, indicating a bearish market. Those were purchased Wednesday with 12 unfilled bids remaining at the close and no remaining offers. It is possible the heavy volume of offers may have finally run its course, allowing sellers to step back. This could increase the aggressiveness of buyers as they want to take advantage of the lower price.

BUTTER:

There has been limited trading in the spot market as buyers and sellers have been able to take care of business through regular outlets in the country. Supply is not burdensome nor is it short. Demand is steady, keeping the market balanced.