OPENING CALLS:
| Class III Milk Futures: | 4 to 8 Lower |
| Class IV Milk Futures: | Mixed |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | 1 to 2 Lower |
| Soybean Futures: | 7 to 10 Lower |
| Soybean Meal Futures: | $1 to $2 Lower |
| Wheat Futures: | 2 to 3 Lower |
MILK:
The block cheese price falling to the lowest level since May 5, 2020, does not bode well for milk prices. The last time prices were this low was during COVID, when the markets were disrupted in many ways. The current prices are the result of bearish fundamentals. Strong milk production and increasing cow numbers have resulted in more supply than demand. It is uncertain how low prices will go before culling will increase and the milk supply tightens. When it does take place, it will not happen overnight. There are currently no indications of this taking place at present. USDA increased its estimate for milk production this year by 200 million pounds on the WASDE report on Monday, anticipating milk production will remain strong.
CHEESE:
Barrel cheese has not been trading on the spot market, but the price adjusted lower as an offer pushed the price down. It had to adjust lower due to the continued weakness of the block cheese price. There is no indication of a market bottom.
BUTTER:
The spot butter price held steady Monday, but further weakness is anticipated due to abundant cream supplies and full churning schedules. Some bulk butter is moving to storage. Other butter is moving to the market to keep plant inventories from building. Sellers continue to lower prices to move supplies.
