OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 3 to 5 Higher |
| Soybean Meal Futures: | $2 to $4 Higher |
| Wheat Futures: | 3 to 4 Higher |
MILK:
Milk futures may trade mixed ahead of spot trading as traders will be uncertain about price direction. Class III milk futures increased despite further weakness of underlying cash. Futures were adjusting due to the sharp decline during the previous days. Futures and cash should be aligned and will react to underlying cash. The May Milk Production report will be released Friday afternoon. I estimate milk production to be 0.3% below a year ago and cow numbers to be down 2,000 head from April. Traders will react to the report as this report has increased in importance. The report was previously used as a guide to the trend, but now it has become more important for current price movement.
CHEESE:
Cheese buyers may remain cautious and wait to see if sellers need to move more supply at reduced prices. If sellers offer at higher prices, or not at all, buyers may be more aggressive and bid higher to obtain the cheese. There is little concern over cheese supply with manufacturing running on full schedules.
BUTTER:
Buyers and sellers are comfortable at the current price level. Retail demand is improving, but there is sufficient supply for that demand. Churning will slow as the cream supply tightens. Inventory is higher than a year ago reducing concern over a tight supply. The butter price is expected to be choppy.
