OPENING CALLS:
| Class III Milk Futures: | 20 to 40 Lower |
| Class IV Milk Futures: | 10 to 20 Lower |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 3 to 7 Lower |
| Soybean Futures: | 5 to 7 Lower |
| Soybean Meal Futures: | $5 to $6 Lower |
| Wheat Futures: | 5 to 7 Lower |
MILK:
Milk futures were hit hard overnight with follow-through losses from last week. The news of potential tariffs on Canada and Mexico last week came to fruition over the weekend, putting substantial pressure on milk futures. Mexico is the largest buyer of overall dairy products and Canada is the largest buyer of butter fat. This could result in significant loss of exports to those two countries and back up supplies into inventory. This is not a reality yet but is the perception of what could take place and that is why traders have been selling this market heavily. There may be little buying interest during spot trading as buyers are not certain how much demand there is going to be from the export market. Domestic demand is steady, but below a year ago. This combination, along with slowly increasing milk production, may add more supplies in inventory and put more pressure on the market.
CHEESE:
Cheese buyers stepped back from the spot market last week and may continue to do so Monday -- waiting to see about any further developments relative to the tariffs on Mexico and Canada. Current suppliers are sufficient for demand and inventory has begun to increase seasonally. Buyers may remain on the sideline.
BUTTER:
The butter price is expected to drift lower as buyers will hold back. Cream supplies are abundant, and churning is active, keeping plentiful supply available to the market and adding to the inventory.
