Friday Morning Dairy Market Update - Traders are Uncertain Over Spot Prices

OPENING CALLS:

Class III Milk Futures:	4 to 8 Lower
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	3 to 5 Higher
Soybean Futures:	2 to 4 Higher
Soybean Meal Futures:	Steady to $1 Higher
Wheat Futures:	2 to 3 Higher

MILK:

Milk futures retraced on Thursday as the market had added extra premium relative to the underlying cash. Mixed underlying cash prices did not provide further direction for traders, resulting in weakness. Milk production continues to increase, allowing more milk to be available for processing. This does not suggest a tightening supply with more milk becoming available for manufacturing over the next three weeks as schools close for the summer. Spot milk prices are significantly lower than a year ago, indicating a plentiful supply.

CHEESE:

The unfilled bids remaining for blocks at the close of spot trading on Thursday suggest the price could move higher Friday. However, the weakness of barrels may indicate the market has reached a plateau. Cheese production is strong as more milk is being diverted to the vat.

BUTTER:

The butter price is expected to continue to remain rangebound for the near term. Strong production is keeping a sufficient supply available for demand. Exports are strong, but inventory remains above a year ago. Food service demand remains lower than anticipated.