OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Steady to 5 Lower |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 6 to 8 Lower |
| Soybean Meal Futures: | $3 to $3 Lower |
| Wheat Futures: | 4 to 6 Lower |
MILK:
Traders may be cautious today due to the large increase of Class III futures on Thursday. Futures may have some extra premium already built into the market. Cheese buyers remain aggressive as they increase ownership for expected demand later in the year. Even though there is sufficient milk for demand, buyers fear milk supply may tighten, resulting in lower cheese and butter production and a faster inventory decline. However, with the higher milk prices, milk production may improve as culling slows and income over feed becomes more profitable. The wide price gap between Class III and Class IV futures has narrowed and may remain that way for a while.
CHEESE:
Block cheese price may reach or exceed $2.00 today but further upside might be limited as prices might remain choppy. There is good reason for cheese prices to be at the current levels, but there may be little reason to push prices higher near-term.
BUTTER:
The downside potential for butter is limited as retail demand improves and cream supply tightens. International demand is improving and prices increasing. Butter production will slow through the summer with higher cream prices causing some plants to sell a portion of their cream rather than churn it.
