Monday Morning Dairy Market Update - Week Begins Under Pressure

OPENING CALLS:

Class III Milk Futures:	5 to 10 Lower
Class IV Milk Futures:	5 to 10 Lower
Butter Futures:	1 to 2 Lower

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Mixed
Soybean Futures:	1 to 3 Higher
Soybean Meal Futures:	Mixed
Wheat Futures:	4 to 7 Lower

MILK:

Traders have an overall bearish attitude in the milk market. This stems from sellers of cheese continuing to offer product to the market even at these low prices. Manufacturers are not interested in building inventory at the plant level, waiting for an increase of prices. Increasing milk production is keeping supply available to processors. Milk production is expected to continue to increase movement through spring flush. Overnight futures were on both sides of unchanged, but are currently lower with traders not expecting any significant strength in the spot market Monday.

CHEESE:

Current cheese output remains strong as milk is available. Spot milk remains available at a significant discount to class making it attractive for processors that have room to utilize it. Cheese is moving in the country with sellers also having to come to the daily spot market to move supply. Buyers remain unaggressive and may remain that way as long as they can purchase cheese without having to bid up for it. This will limit upside price potential.

BUTTER:

Not much is expected again this week as the price remains in the range it has been in. The weakness Friday was more than would have been expected for a daily move. However, with light trading activity, buyers or sellers can sometimes have a difficult time moving butter without having to be aggressive to find someone to step up on the opposite side.