OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 2 to 5 Higher |
| Soybean Meal Futures: | $2 to $3 Higher |
| Wheat Futures: | 6 to 8 Higher |
MILK:
Class III milk futures had a very strong day with large gains like the movement that took place on Monday. The March contract has increased about $1.80 over the past 1 1/2 weeks. The market has uncovered strength due to stronger cheese prices but mostly due to the gain of dry whey. There is a caution that must be exercised as the market may have moved too high, too fast. Any weakness of underlying cash could cause the market to plummet quickly. There are reports that cheese demand has increased internationally with other varieties of cheese seeing more interest. Milk production continues to hold well. If milk prices continue to improve, dairy cattle numbers will stabilize and slowly increase even though replacement heifers are pricey. Farmers will want to keep barns full.
CHEESE:
Block cheese price has moved back to the highest level it has been since November 17, 2023. This has provided support in the Class III market, improving the price outlook. However, the upside may be limited as milk production continues to hold leaving sufficient milk available for manufacturing.
BUTTER:
Domestic butter demand is strong, and inventory is below a year ago. If exports increase this year, the market could become very strong, and prices could increase significantly. Butter futures do not have much premium factored into the market, but they are keeping pace with underlying cash.
