OPENING CALLS:
| Class III Milk Futures: | Steady to 5 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 4 to 7 Higher |
| Soybean Meal Futures: | $3 to $4 Higher |
| Wheat Futures: | 3 to 4 Lower |
MILK:
Milk futures have yet to find support from underlying cash. Block cheese has increased over the past two days, but the gain has been more than offset by the decline of barrel cheese. Milk supply is sufficient for bottling and manufacturing, which keeps buyers of the finished products comfortable. There is no tightness seen or anticipation in the foreseeable future. Spring flush is beginning, and it is not certain how much more milk will be available; but we know it will follow a seasonal increase. USDA will release the World Agricultural Supply and Demand report Tuesday, which will show estimates for grain supply and demand, but will also show estimates for milk production, milk prices, and dairy product prices for this year. This will not be a market mover for dairy as it provides estimates mainly based on what has taken place over the past month.
CHEESE:
The block/barrel spread has widened quickly, moving it to 22.50 cents. It will be interesting to see if the strength of blocks will pull barrels higher or if the weakness of barrels will pull blocks lower. One thing we do know is that the block/barrel spread can remain exceptionally wide for an extended period. Cheese prices may have limited upside potential in the near term.
BUTTER:
Price bounced off the bottom of the range and may see a further gain Tuesday. However, it is not expected to move out of the sideways range anytime soon. Strong butter production and increasing inventory should keep upside price potential limited for the time being. Cream supply remains plentiful, keeping churns busy.
.jpg)
