OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 10 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 8 to 10 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 7 to 10 Higher |
MILK:
Milk futures are expected to trade mixed ahead of spot trading. If there is a minor increase in cheese prices, Class III futures may show little change as higher prices are already factored in. If butter price increases, Class IV futures could show strong gains as contacts held back last week even though butter price jumped. The FSA did release the average soybean meal price for April at $357.68. This puts income over feed at $9.60. The result is no Dairy Margin Coverage payment for the month. The current milk futures prices and gain market fundamentals indicate there may not be any further income over feed prices low enough to trigger DMC payments for the rest of the year.
CHEESE:
Cheese prices are supported but may not have sufficient buying interest to show continued price strength. Surprisingly, the block/barrel spread remains inverted by a significant amount. Cheese demand is showing signs of improving.
BUTTER:
The buying interest in butter during the past two days may continue. The sharp decline seems to have been a short-lived reaction to the cold storage report. Price weakness will be viewed as a buying opportunity. Cream supply is expected to tighten in the coming weeks.
