OPENING CALLS:
| Class III Milk Futures: | 8 to 15 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | 1 to 2 Lower |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 4 to 6 Higher |
| Soybean Meal Futures: | $1 to $2 Higher |
| Wheat Futures: | 3 to 4 Higher |
MILK:
Class III milk futures have had a substantial increase over the past week and may be in for a correction as the market outpaced the underlying cash. Some of the large gains were the result of futures holding a discount and then removing the discount and adding a premium. This fueled the substantial turn in the market. Demand for dairy products is mixed, and the milk supply is increasing. Plants are not overwhelmed and can absorb the extra milk. However, spot milk remains available at a discount of as much as $7.00 below class. Traders who purchased contracts earlier may decide to liquidate to take some profits as they turn cautious over further upside potential.
CHEESE:
The block cheese price has moved within 1.50 cents of the previous high. The price fell back from that level as buyers stepped back from the market. The current supply is not tight. It could be a similar pattern this time if buyers have purchased what they need for now and step back, allowing the price to fall. An unwillingness of buyers to bid higher may increase selling interest, moving more cheese to the market.
BUTTER:
Unlike cheese, the butter price remains in a sideways range. Retail demand is improving, but food service demand remains lackluster. The Global Dairy Trade auction showed an increase of 3.8% for the previous event at $3.63 per pound, and well above the U.S. price, which should keep exports strong. The price is expected to increase during the second half of the year as churning slows and demand improves.
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