OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Steady to 1 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 1 to 2 Higher |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 1 to 2 Lower |
MILK:
Milk futures seem to have found a bottom for the time being. It is uncertain whether demand will improve over the next few months. An improvement in demand will be critical to limit the increase in inventory levels. The cold storage report may not have been overly bearish to the market, but it may limit the upside price potential for the coming months. Inventory increased in February despite there being three fewer days than January. Milk receipts are increasing at the plant level as the spring flush begins. Plants have sufficient capacity to handle the milk and should not put too much pressure on spot milk prices in the near term. The uncertainty in the market is how much milk production will increase due to higher cow numbers than a year ago.
CHEESE:
Cheese prices have increased for two consecutive days. Price increases have lasted two and sometimes three days before prices fell back. The buying takes place as orders need to be filled and not specifically to build inventory for later demand. Aging programs need to be maintained with buying mainly confined to an as-needed basis.
BUTTER:
The cold storage report was bearish for butter as the increase of 33.8 million pounds from January was substantial, given that there were three fewer days in February than January. Abundant cream supplies and butter manufacturers running at capacity provided large amounts of butter to the market. This may keep the butter price in the current range for a while.
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