OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 3 Lower |
| Soybean Futures: | 8 to 12 Higher |
| Soybean Meal Futures: | $2 to $4 Higher |
| Wheat Futures: | 4 to 6 Lower |
MILK:
It will be interesting to see if buyers of block cheese will be aggressive and push price above $2.00 this week. There is nothing special about the $2.00 level other than it is a round number and a psychological price. If further gains are seen today or this week, Class III milk futures should respond with higher prices. Slowing milk production should support prices as manufacturing slows. However, demand will need to improve to reduce inventory. Traders will wait for spot trading to provide direction.
CHEESE:
Prices seem to be supported by buyers purchasing what they need without being aggressive. Trading activity was very light last week with only 4 loads traded on the spot market for blocks and 4 for barrels. Cheese is available in the country limiting the need to come to the spot market. However, supply is expected to tighten as the year progresses and milk production decreases. Last week, the block cheese price increased 2.50 cents with barrels gaining 5 cents.
BUTTER:
Butter supply is sufficient with inventory above a year earlier. However, reduced churning activity and steady demand should reduce stocks to below year-earlier levels. This may not move price substantially higher as there is no concern over a tight supply. Slow export demand will have a negative influence on price potential. Butter price increased 7 cents last week but was offset to some extent by the decline of 1.50 cents for Grade A nonfat dry milk.
