OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 3 to 5 Lower |
| Soybean Meal Futures: | $3 to $7 Lower |
| Wheat Futures: | 1 to 2 Higher |
MILK:
The strength of Class III milk futures was fueled by the sharp increase in the barrel price Tuesday. The increase may have been too much relative to the underlying cash and may correct somewhat Wednesday. The announcement of the testing of ground beef for the avian flu virus did not impact the dairy markets as it did the beef markets. The virus matter had been found in some milk samples, but the market seemed to take that in stride. One of the reasons it may be impacting beef futures more is there are more traders in the live and feeder cattle markets. Large fund traders can move the market more based on a fundamental change or perception. The dairy markets do not have that type of trading activity and are driven by a different price discovery mechanism. The dairy market can move quickly due to less trading volume but will move in correlation to underlying cash. The April Federal Order class prices will be announced Wednesday.
CHEESE:
The sharp increase in barrel cheese price Tuesday seemed to be a buyer needing to fill immediate orders and bid up the price until a load was purchased. Fundamentals do not suggest supply is tight, which may result in sellers becoming more aggressive at the higher price.
BUTTER:
Buyers and sellers seem comfortable at the current price with supply and demand balanced. The market is supported with prices potentially slowly improving as cream supply tightens and demand increases seasonally. Churning remains active as manufacturers desire to build inventory.
