Thursday Morning Dairy Market Update - Traders Remain Uncertain Over Price Strength

OPENING CALLS:

Class III Milk Futures:	Mixed
Class IV Milk Futures:	Mixed
Butter Futures:	Mixed

OUTSIDE MARKET OPENING CALLS:

Corn Futures:	1 to 3 Higher
Soybean Futures:	12 to 16 Lower
Soybean Meal Futures:	$5 to $6 Higher
Wheat Futures:	1 to 3 Lower

MILK:

There was very little activity in Class III futures overnight, and what activity took place happened at lower prices. Most bids and offers were placed and left without interest in moving them. The substantial increase in the block cheese price was met with little excitement. Milk production remains strong, with spot milk price continuing to run below class. More milk will be diverted from bottling to manufacturing as schools close for the summer. Traders have little reason to believe there will be a lack of milk available to the market. Demand for dairy products is not exceptional, limiting the upside price potential.

CHEESE:

Cheese inventory is growing and should continue to do so over the next few months. However, current supplies remain below a year ago. This could support prices if demand improves as the year progresses. Current cheese production is increasing as more milk moves to manufacturing.

BUTTER:

The butter market has yet to see a surge in demand. Retail demand is reported to be increasing, but food service demand is lower than usual for this time of year. The cream supply remains abundant but is expected to decrease over the coming weeks.