OPENING CALLS:
| Class III Milk Futures: | 10 to 15 Lower |
| Class IV Milk Futures: | 5 to 10 Lower |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | Steady to 2 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 2 to 4 Lower |
MILK:
The pressure on milk futures continued overnight with strong volume. Interestingly, steady cheese prices Tuesday resulted in substantial pressure on milk futures. The current milk supply is lower than a year ago with the potential for it to be lower the rest of this year. However, if demand remains as it is, there may not be much more upside potential than milk futures already indicate. Demand will need to improve and supplies will need to tighten for higher milk prices to unfold. There is a lot of the year remaining and one thing we know is that it will be a year of substantial volatility based on what we have already seen and are currently seeing.
CHEESE:
The action in spot cheese trading over the past two days would suggest price may weaken either Wednesday or the rest of this week. Buyers are not aggressive after the large increase Monday. Buyers have been purchasing cheese for aging programs and for later demand without having to be very aggressive. However, they have not been purchasing large volumes as they do not want to pay for extra storage.
BUTTER:
Even though butter price declined Tuesday, price is expected to stairstep higher as the year progresses. Demand has been good and buyers are willing to pay for supply to keep demand satified. Price weakness will be met with buying interest. The March Cold Storage report will be released Wednesday afternoon and is expected to show an increase in butter inventory but not much higher than a year ago.
