OPENING CALLS:
| Class III Milk Futures: | 5 to 8 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | Mixed |
MILK:
The milk production report showed that the milk supply is plentiful and may remain that way for the foreseeable future, as cow numbers are higher and milk per cow exceeds a year ago. This sets the stage for limited upside price potential. Milk futures show lower milk prices throughout the year, but farmers intend to maintain milk production and keep the stalls full. Culling is not the only way to generate more immediate cash and to reduce feed costs. Substantial income is being received for beef-on-dairy calves, reducing the need to cull heavily. This has consistently been seen in the milk production and the livestock slaughter reports. The March Livestock Slaughter report will be released this afternoon and may continue to show the reduced slaughter of dairy cattle.
CHEESE:
Cheese output is increasing as milk receipts continue to increase at plants. Spot milk prices for milk were as much as $7 below class last week. Many plants cannot purchase the extra milk as they are already running on full schedules. The March Cold Storage report will be released today, which is expected to show an increase in inventory, but supplies should remain below a year ago.
BUTTER:
The butter price is expected to remain rangebound in the near term. The cream supply remains heavy and is expected to remain that way for another month. More demand for cream is coming from ice cream manufacturers, which should reduce the abundance but not tighten the supply. The March Cold Storage report is expected to show a significant increase in butter stocks from February.
