OPENING CALLS:
| Class III Milk Futures: | MIxed |
| Class IV Milk Futures: | 6 to 12 Higher |
| Butter Futures: | 1 to 2 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 1 to 3 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | Mixed |
MILK:
Milk showed substantial strength Tuesday with Class IV futures leading the charge. Support stemmed from the increase in butter and nonfat dry milk prices. It seems the potential for milk production to hold better than expected this year and even outpacing last year as the year progresses has been diminished. The April Milk Production report turned prices lower for a brief period. The market has overcome that report and has regained and exceeded the losses. Some long-term weather outlooks forecast hot weather that will impact milk output this summer. That would reduce milk components, impacting cheese yield and butterfat availability. Further declines in cow numbers may slow as higher milk prices will slow culling. The May Federal Order class prices will be announced Wednesday. USDA will release the April Dairy Products report Wednesday afternoon. There will be no Dairy Revenue Protection prices released due to the report.
CHEESE:
Cheese prices held steady Tuesday, but are expected to see further strength. Buyers may not be very aggressive and try to outbid each other, but may show consistent buying. Demand for cheese curd is strong with overall demand improving slowly.
BUTTER:
The higher butter price is not showing any sign of price resistance. Any price weakness will be viewed as a buying opportunity. Buyers are looking ahead and preparing for third and fourth-quarter demand. Butter futures continue to hold a premium with the anticipation of higher prices yet to come.
