OPENING CALLS:
| Class III Milk Futures: | Mixed |
| Class IV Milk Futures: | 4 to 10 Higher |
| Butter Futures: | Steady to 1 Higher |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 2 to 3 Lower |
| Soybean Futures: | 2 to 3 Higher |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 1 to 2 Lower |
MILK:
Class III milk futures were lower on Wednesday despite the strength of underlying cash. Traders became cautious as the block cheese price did not hold the higher price reached during spot trading. The spot price closed higher, but the concern was whether a threshold may have been reached. The milk supply is sufficient for demand, with more milk moving to manufacturing. Milk output continues to exceed a year ago, with the improved outlook for milk prices likely to maintain that trend. The Federal Order reforms will be implemented next week, but that is not expected to impact the market as the changes in price will impact the utilization of each Federal Order and will not impact supply and demand.
CHEESE:
Cheese has found solid support as buyers are increasing ownership to hedge against the potential for higher prices if demand improves. Cheese production is strong with more milk moving to the vat. The supply is sufficient for demand and could limit the upside price potential.
BUTTER:
The butter price may continue to increase seasonally as buyers have turned more aggressive. Butter has been put into storage for later use, but the overall inventory is lower than a year ago. If the current trend of strong production and less inventory than a year ago continues, the price could move substantially higher.
