OPENING CALLS:
| Class III Milk Futures: | 5 to 15 Higher |
| Class IV Milk Futures: | 3 to 5 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Higher |
| Soybean Futures: | 2 to 4 Higher |
| Soybean Meal Futures: | Steady to $1 Lower |
| Wheat Futures: | 3 to 4 Higher |
MILK:
The June and July Class III futures contracts made new highs last week, supported by strong underlying cash. Class III futures were higher overnight as the weakness on Friday was opposite of what the underlying cash indicated. The trading activity overnight may be just a correction to move in line with cash rather than the anticipation of higher cash prices. Cheese demand is reported to have improved. This is positive now that more milk is moving to manufacturing as schools close for the summer. The April Milk Production report will be released on Wednesday and is expected to show milk production above a year ago.
CHEESE:
The strong gains in spot cheese prices last week were a surprise as current supplies are sufficient for demand. However, increasing prices will cause more buyers to step up to purchase, attempting to get ahead of further price increases. Buyers may not be quite as aggressive at the beginning of the week and may pause to assess how much more aggressive they need to be at this time of year.
BUTTER:
Retail butter demand is showing signs of improving. Demand from the food service industry remains slower than a year ago and may remain that way for a while. However, what is not consumed at the restaurant level may be made up for with consumption at home. Overall demand is expected to increase as the summer progresses.
