OPENING CALLS:
Class III Milk Futures: | Mixed |
Class IV Milk Futures: | Mixed |
Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
Corn Futures: | 2 to 3 Lower |
Soybean Futures: | 4 to 6 Lower |
Soybean Meal Futures: | $2 to $3 Lower |
Wheat Futures: | Mixed |
MILK:
The substantial rebound of the block cheese price was unexpected, indicating buyers wanted to take advantage of the dip in price to increase ownership of cheese. It is not that there is a shortage, but there is the potential for further tightening of the milk supply if cow numbers stabilize and milk production per cow does not improve. Some of the adverse winter weather seen in some areas is impacting the milk supply and demand. This is not unusual during the winter and may be temporary. The greater issue is the impact of bird flu and the tight heifer replacement supply. Dairy cattle slaughter is running below a year ago, but it is not adding much extra milk to the supply. The market is expected to remain choppy but supported.
CHEESE:
Cheese supplies are sufficient for demand and keep buyers from leapfrogging over each other to purchase supplies. Cheese production is steady. However, the monthly dairy products reports have shown a lower output of American cheese with an increase in other varieties. American cheese is traded on the daily spot market and reduced production may have an impact.
BUTTER:
The butter price is expected to be supported but choppy. Buyers have been able to purchase quite a bit of supply on the spot market without having to chase the market higher. Strong butter production may limit the upside price potential.