OPENING CALLS:
| Class III Milk Futures: | 8 to 12 HIgher |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Higher |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 6 to 8 Higher |
MILK:
Overnight trading activity in Class III futures has been the highest seen in some time. Most contracts are higher with some contracts showing double-digit gains. There has been no significant news overnight to trigger the increased trading interest. Traders seem to believe cheese prices will remain steady to higher. Milk output is slowing and cheese inventory is below year-ago levels. Feed prices are less expensive and may remain that way if current crop conditions persist and pollination takes place without problems. The less expensive feed prices generally result in higher milk output and lower prices. However, a tight heifer supply and lower cow numbers may keep production lower for an extended time. This may keep milk prices supported.
CHEESE:
Cheese prices have been holding recently, indicating buyers are willing to purchase at the current level and not to wait for price weakness. An increase in demand may reduce inventory more than expected resulting in higher prices. Cheese prices should be supported at the current level with higher prices expected.
BUTTER:
The weakness of price on Wednesday was a surprise. Churning is slowing as the cream supply tightens and multiple prices increase. Some plants are reducing churning schedules as higher cream prices reduce profitability. Retail demand has been steady but is expected to improve through the summer.
