Wednesday Morning Dairy Market Update - Cash Prices Expected to Remain Choppy

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Steady to 1 Higher

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	Steady to 1 Higher
Soybean Futures:	4 to 6 Lower
Soybean Meal Futures:	$1 to $2 Lower
Wheat Futures:	4 to 6 Higher

MILK:

The market does not have much direction currently. The underlying cash prices are expected to remain choppy for the near term. The milk supply is lower than a year ago but sufficient for demand from bottling and manufacturing. Bird flu remains a problem but has not impacted the milk supply as anticipated. The tight heifer supply has increased prices substantially, but some expansions are still taking place. Cow numbers have been holding as dairy farms have reduced culling. They have increased income significantly with beef on dairy calves. The outlook for the milk price this year does not look much better than last year.

CHEESE:

The cheese price may have limited upside potential as cheese production remains steady and demand is slightly below a year ago. Inventory is increasing seasonally, but it is running below a year ago. However, that has not tightened the market.

BUTTER:

The bounce in the butter price on Tuesday is expected to the short-lived as butter supplies are plentiful. Cream supplies remain abundant with churns busy utilizing the available supply. Butter buyers are not expected to remain aggressive.