OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 6 to 8 Higher |
| Soybean Futures: | 16 to 20 Higher |
| Soybean Meal Futures: | $4 to $5 Higher |
| Wheat Futures: | 10 to 12 Higher |
MILK:
The continued decline of June Class III milk is very concerning as cheese prices continue to erode. June Class III is nearly $3.00 below Class IV. The May Federal Order prices will be announced Thursday with the trade expecting a Class III price of $16.17 and a Class IV price of $18.12 already at a $2.00 difference. This is going to impact dairy farms in a big way as the Class III price would be $8.51 below a year ago and Class IV would be $6.87 lower. This cuts milk income by one third from a year ago. Hopefully, this will be short-lived, but the current futures market does not suggest this may be the case. Milk supply is plentiful and not expected to tighten anytime soon. Heavy culling is expected to take place with these low prices.
CHEESE:
Block cheese price has not yet found a bottom and even with these low prices, buyers have little interest in purchasing supply for later demand, at least not aggressively. They have been able to purchase at low prices due to sellers remaining aggressive. Some of these purchases are likely for later demand, which may have an impact on price potential later in the year.
BUTTER:
Price continues to remain steady within a range as supply and demand is balanced. There seems to be nothing that will move this market out of the sideways trading range it has been in so far this year. Retail and food service demand is good but not exceptional. There is no concern over supply tightening.
