OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 3 to 6 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 4 to 6 Higher |
MILK:
Class III futures have been slowly settling back from the highs set in mid-June. The choppiness and nearly daily divergence of cheese prices leaves the market with limited support. Milk production remains below a year ago and may remain that way for much of the year. However, higher milk prices will increase the desire to push milk production by improving rations, and cow comfort, and maintaining and adding cows. This will not happen overnight and may take much of the year to see the results. USDA will release the May Agricultural Prices report this afternoon and will provide the average prices used in calculating income over feed for the Dairy Margin Coverage program. The lower feed prices and higher milk prices will likely improve income over feed from the previous month resulting in no payment under the program.
CHEESE:
Cheese is expected to continue the pattern of mixed prices leaving limited market direction. Blocks moved above barrels where it has not been for quite some time. This does not provide long-term direction but moves it to a normal type of market. Prices are expected to remain choppy.
BUTTER:
Price is poised to increase further as buyers have turned more aggressive. Demand is improving at the retail level and buyers are looking ahead to demand later in the year. The upside potential may be limited near term, but the price will remain supported.
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