OPENING CALLS:
| Class III Milk Futures: | Steady to 4 Lower |
| Class IV Milk Futures: | 10 to 20 Lower |
| Butter Futures: | 2 to 3 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 2 to 4 Lower |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 3 to 4 Lower |
MILK:
Milk futures took a beating on Tuesday with Class III pressure by the minor weakness of blocks and dry whey while Class IV futures fell due to the weakness of nonfat dry milk and the extreme weakness of butter. That continued overnight with usual trading activity and further pressure on Class IV contracts. It is unusual to see trading activity in Class IV futures overnight, but the volume was good with futures showing double-digit losses. If the current trend seen in the milk production report continues, milk production may be stronger than expected and move milk output higher than a year ago. This could leave milk prices higher than a year ago, but not as good as was hoped.
CHEESE:
Traders are uncertain about spot cheese prices today. The slight weakness on Tuesday triggered a negative reaction in milk futures. Barrels held but may show weakness as buyers on the spot market may not feel the need to remain aggressive at the current price. Cheese output is increasing as more milk flows to the vat.
BUTTER:
It is unusual to see much volume in overnight trade, but last night was the exception to the norm. Traders who could not liquidate due to futures being down the limit on Tuesday wanted to get out of the market in case spot butter declines further. Overnight futures were 1.75 to 4.35 cents lower with further pressure expected. Buyers of butter may hold back to see how aggressive sellers will be due to the large decline on Tuesday.
