OPENING CALLS:
| Class III Milk Futures: | 6 to 12 Higher |
| Class IV Milk Futures: | 5 to 10 Higher |
| Butter Futures: | Mixed |
OUTSIDE MARKET OPENING CALLS:
| Corn Futures: | Mixed |
| Soybean Futures: | 2 to 3 Lower |
| Soybean Meal Futures: | Mixed |
| Wheat Futures: | 3 ro 5 Higher |
MILK:
It seems the recent trading pattern may develop again Wednesday. The pattern has been that milk futures will move in one direction or the other, despite the underlying cash prices not supporting the move. On Tuesday, spot prices were rather stable, but further pressure was put on milk futures as short-term traders have been able to extend the weakness for their benefit and may now cover those short positions at a greater profit. This has happened recently in both price weakness and strength. This type of market action does provide opportunities for hedgers to initiate better positions to protect prices due to the increase in volatility. Market fundamentals have remained stable and may remain that way for a longer period.
CHEESE:
Lower cheese prices are expected to find buying interest again. Supplies are readily available, but it makes sense to purchase at low prices to hedge against higher prices that may develop as the year progresses. Higher milk production may limit the upside potential as cheese production remains strong.
BUTTER:
The butter price may have greater upside potential than cheese, but the strength may be limited due to plentiful cream supplies from record butterfat content in milk. Export demand remains very strong and should help provide support to the maket.
