OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 2 to 6 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 4 Lower |
| Soybean Futures: | 4 to 7 Lower |
| Soybean Meal Futures: | $2 to $3 Lower |
| Wheat Futures: | 2 to 4 Lower |
MILK:
Class III milk futures moved higher Monday as traders focused more on the strength of blocks than the weakness of barrels. The higher block price offset the lower barrel price but traders also seem optimistic about the potential for cheese prices to increase. This may be heightened by the milk production report showing milk output in May down 0.9%. Butter and cheese demand generally increases during the second half of the year and inventory declines. If milk production remains below a year ago, the supply of dairy products could tighten. The Wisconsin Department of Agriculture, Trade, and Consumer Protection requires testing for Influenza A in lactating dairy cattle before moving cattle to fairs or exhibitions to limit the spread of avian flu among dairy cattle.
CHEESE:
It seems barrel cheese is more abundant as the price spread between barrels and blocks is narrowing. Cheese production is steady as more milk has been moving to manufacturing. However, inventory is not expected to be increasing over the level of a year ago. The May Cold Storage report will be released this afternoon and is expected to show cheese inventory in line with a year ago.
BUTTER:
The butter price is at the bottom of the recent range it has been trading. Buyers may increase purchases at the lower price as they look ahead to demand late in the year. Some contracting is being done for fourth-quarter needs. Retail demand is improving while food service demand is lower than expected for this time of year.
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