OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Higher |
| Class IV Milk Futures: | 4 to 8 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 1 to 3 Higher |
MILK:
The underlying cash prices did not provide the strong support seen in Class III futures on Wednesday. The strength seemed to stem from the bullish nature of the cold storage report. Milk production running lower than a year ago is positive for milk prices. However, manufacturers have sufficient milk supply to maintain production leaving them unconcerned about a shortage. Higher milk prices have slowed culling on increased cow numbers. Cow numbers in May were 68,000 head lower than a year ago, but cow numbers have moved to the highest level since October. This could result in higher milk output later in the year. The May Agricultural Prices report will be released on Friday with the income over feed price expected to be higher than last month resulting in no Dairy Margin Coverage payment.
CHEESE:
Cheese prices have been choppy and are expected to remain choppy in the near term. Buyers and sellers are taking care of business without much fanfare. Cheese demand is improving for some varieties with plants indicating that their current cheese production is committed and they are not taking on any new customers.
BUTTER:
The lower butter price finally spurred buying interest on Wednesday with buyers having to bid up to obtain supply. The strength will result in sellers holding back to see how aggressive buyers will be. Butter production will slow over the coming weeks as the cream supply tightens and plants shut down for seasonal maintenance.
