OPENING CALLS:
| Class III Milk Futures: | 10 to 15 Higher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 3 to 8 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 1 to 3 Higher |
MILK:
Milk futures may have been overdone to the downside Tuesday, prompting the higher overnight trade. Support might also stem from cheese stocks in May being below a year ago. If demand increases and milk production remains below a year ago, the supply could tighten, resulting in higher milk prices. However, the increase in cow numbers moving the nation's dairy herd to the highest level since October could result in increased milk output later in the year. Summer weather will take its toll on cow comfort and milk production but it is difficult to say how much impact it will have. Farms have made great strides in keeping cows comfortable and milk output strong.
CHEESE:
Cheese inventory generally increased in May and the decline in inventory is friendly to the market. The only category of cheese showing an increase from April was the Other Cheese category. This is any cheese not considered American or Swiss. Cheese buyers may not be aggressive Wednesday if cheese is offered on the spot market.
BUTTER:
It has been a bit surprising buyers have not been more aggressive at the lower prices. The butter price is unlikely to decline below $3.00, but there is sufficient supply for demand, which may leave the price in a range. A tightening cream supply will reduce output in the coming weeks.
