OPENING CALLS:
| Class III Milk Futures: | 5 to 1o Lower |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Higher |
| Soybean Futures: | 5 to 7 Lower |
| Soybean Meal Futures: | $2 to $4 Lower |
| Wheat Futures: | 5 to 8 Higher |
MILK:
Continued selling pressure after the settlement of milk futures Tuesday indicated there would be follow-through selling in overnight trade. That took place with Class III futures steady to 11 cents lower. It will be interesting to see trade develop as the morning progresses as traders anticipate what spot prices will do. Last week, the fear of cheese prices falling back was negated as higher prices unfolded. Traders are cautious as maybe cheese prices moved too high, too fast, thus exceeding underlying fundamentals. If that were the case, cheese prices would have fallen back already. Buyers are looking ahead to the potential of a tighter supply at a time when demand will improve.
CHEESE:
Buyers of cheese would rather be cautious and increase ownership of cheese now rather than hope for a decrease of prices that may never develop. As long as cheese is offered to the spot market, buyers will purchase what is available. The focus has changed from one of purchasing supply as needed to purchasing to avoid further price increases. There may be price retracements, but it seems there is sufficient support to warrant a continued trend higher.
BUTTER:
Butter continues to move and business is done without much fanfare. Supply and demand are balanced, leaving price to slowly trend higher as buyers look to increase ownership. Cream supply is adequate but tightening. Butter futures do not carry any premium to the current cash price, which is unusual.
