OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 4 Lower |
| Soybean Futures: | 4 to 5 Lower |
| Soybean Meal Futures: | $3 to $5 Lower |
| Wheat Futures: | 1 to 3 Lower |
MILK:
Class III milk futures have increased substantially over the past few weeks. There is some concern the market will hold due to the magnitude of the increase over a short period. Historically, price increases as such have resulted in a significant price retracement even if the market remains bullish. However, the perception of a tighter milk supply as the year progresses may continue to provide support as buyers could remain aggressive in the spot market. The price spread between Class III and Class IV has narrowed substantially with the June Class III contract less than $0.20 below the June Class IV contract.
CHEESE:
Cheese prices could go either way Monday as buyers could hold back due to the recent strong price increases. Prices may have reached a level at which buyers may be resistant. There is sufficient supply for demand, but the perception is that the supply could tighten quickly if demand increases. That concern may provide substantial support in the market.
BUTTER:
The decrease in price during the second half of the week was a little surprising, but not a concern that price may trend lower. Demand is steady to higher for retail and the food service industry. Strong churning is meeting immediate demand and building inventory for later demand. Manufacturers are focusing on the third and fourth quarters and taking steps to prepare for the contracted supply and increased demand. The cream supply will tighten as schools close and the summer progresses.
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