OPENING CALLS:
| Class III Milk Futures: | 5 to 10 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | Steady to $1 Higher |
| Wheat Futures: | 2 to 3 Lower |
MILK:
Class III milk futures continue to fall following the weakness of underlying cash. The argument could be made that the price went too high, too fast as buyers outbid each other trying to purchase cheese before prices increased. This propelled milk futures higher as traders became bullish. There was also concern that milk production would continue to decline due to the impact of the H5N1 virus and increased culling. That idea changed with the release of the April Milk Production report showing production holding better than expected. This resulted in the fear of tight milk production dissipating for the time being. Class IV futures have been supported by pushing to new contract highs in anticipation of the continued strength of butter.
CHEESE:
It is uncertain how much further cheese prices will decline before buyers become more aggressive. There is buying interest but buyers are waiting for lower prices to increase their supply of cheese. The wide spread between blocks and barrels remains a surprise as it does not seem the barrel supply is tighter than blocks.
BUTTER:
Butter demand is steady to stronger, which is reflected in the spot market. It is uncertain which direction the price will move Thursday as no buyers or sellers showed up during spot trading Wednesday. Price is expected to remain supported but may hold sideways for a time.
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