OPENING CALLS:
| Class III Milk Futures: | 10 to 15 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Steady to 1 Lower |
| Soybean Futures: | 4 to 6 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 4 to 6 Lower |
MILK:
The gains in milk futures on Monday extended through the overnight trade. Overnight trade may have been supported by the fact that American cheese inventory declined in February. Inventory generally increases as production exceeds demand and stocks are built. If milk production continues to remain below a year earlier and demand increases as the year progresses, higher milk prices may unfold. However, eating away from home is more expensive which may limit restaurant traffic and higher prices may impact consumer buying habits. Lower milk production may be sufficient to satisfy lower demand. Overnight trading in Class III futures showed good volume with prices ranging from 10-21 cents higher.
CHEESE:
The increase in cheese prices resulted in higher Class III futures prices as traders initially liquidated their short positions. The February Cold Storage report showed a decrease in inventory for American cheese but an overall increase in total cheese stocks. The buying of underlying cash may not be impacted much by the report, but it may provide overall support to the market.
BUTTER:
Butter inventory increased significantly in February but is not unusual for this time of year. Manufacturers wanted to build inventory to prepare for upcoming demand. This is not expected to be bearish for the market but may make buyers more comfortable with current supplies. Price is expected to remain choppy.
